Monty IDA Nets Upgrades

The Montgomery County Industrial Development Authority will bring $77 million of lease revenue bonds in a negotiated sale to market next week just after it garnered upgrades from Standard & Poor’s and Moody’s Investors Service.

Standard & Poor’s raised its underlying rating on the Montgomery County IDA to AA-minus from A on its outstanding lease revenue bonds and assigned the new rating to the upcoming deal.

Moody’s assigned its A1 rating to next week’s issue while upgrading the IDAs long-term general obligation bond rating to Aa3 from A1. Moody’s also upgraded $45.7 million oflease revenue bonds to A1 from A2, and $6.3 million lease bonds to A2 from A3.

Davenport & Co. is the lead underwriter on the Series 2008 offering, while Morgan Keegan & Co. is also on the underwriting team. Trustee is Richmond-based U.S. Bank National Association. Sands, Anderson, Marks & Miller PC is bond counsel. Underwriters counsel is Hunton & Williams LLP.

Standard & Poor’s said the IDA’s credit characteristics include the AA-rated general creditworthiness of Montgomery County and the county’s “demonstrated commitment to making annual appropriation payments for various county and school projects.”

Moody’s also noted that the Series 2008 lease revenue bonds are secured by a lease between the IDA and the county, under which rent payments subject to annual appropriation are an absolute and unconditional obligation of the county.

Proceeds from the new issue will be used to finance a new county public safety building, improvements and renovations to the county jail, a stadium at Blacksburg High School, two new public schools, and a new county courthouse building.

The county’s five-year capital spending plan, including next week’s issue, totals $133.8 million with 97% expected to be debt-financed, Moody’s said.

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