Frederick County Sale

Frederick County plans to bring $80 million of general obligation public facilities bonds to market in a competitive sale tomorrow.

Proceeds will finance capital projects for public schools, community college buildings, county buildings, roads and bridges, and water and sewer facilities, among other projects.

Davenport & Co. is financial adviser. Venable LLP is bond counsel.

Moody’s Investors Service rates the deal Aa2 with a positive outlook, Fitch Ratings assigned a AA-plus and a stable outlook, and Standard & Poor’s rates it AA with a stable outlook.

Fitch affirmed the AA-plus on the county’s outstanding $472 million of GOs. It said the rating reflects the county’s ability to maintain a strong financial position and moderate debt levels while effectively managing significant growth.

“The county is evolving from a somewhat rural area to an important employment center within the Baltimore-Washington region, although approximately 85% of the county’s land area remains agricultural or preserved,” according to a Fitch ratings report.

Other factors contributing to the county’s rating include unemployment rates that have been consistently below state and national averages, and a labor force that has expanded steadily between 1998 and 2006, although growth has been stagnant in 2007 and 2008. The county retains significant financial flexibility through tax-raising capacity and strong reserves, Fitch said.

Analysts said the county’s fiscal 2007 unreserved general fund balance was equal to $97.6 million, or 23% of spending, “a solid level,” but a decline from 27% in fiscal 2006. Frederick County sold $92 million of GOs on May 15, 2007, to UBS Securities LLC at a 4.134% true interest cost.

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