ATLANTA - Triple-A rated Durham County, N.C., will be in the market today with roughly $46 million of general obligation bonds as it sells the remainder of a 2003 voter authorization.
The bonds will be sold competitively with Robinson, Bradshaw & Hinson PA as bond counsel. The state's Local Government Commission acts as financial adviser.
The deal includes $12.1 million of Series 2008A bonds and $34 million of Series 2008B bonds. Both mature from 2009 through 2027. Moody's Investors Service and Standard & Poor's affirmed the triple-A ratings they assign Durham County.
Proceeds from the Series 2008B bonds will be used for school improvements. In North Carolina, counties issue debt for schools. The 2003 bond package that is resulting in today's sale included $123 million worth of debt requests. The bulk of that was about $114 million for public schools and community colleges, with the rest for libraries and museums.
The 2008A bonds will fund general public improvement projects throughout the county. They are being issued as what are called two-thirds bonds. North Carolina law allows two-thirds of an issuer's amortizing debt to be replaced by new bonds.
George Quick, the finance director for the county, said the two-thirds bonds will be used to finish up the construction of a courthouse and a human services complex. Durham is also putting together an interim finance package that will be used to start additional school projects until officials determine when to issue more GO debt for schools.
He added that there are no immediate plans to issue debt this year.
As officials work through school and general improvement project needs, they are also closely monitoring a swap agreement they entered into in 2004 with Rice Financial Advisors. The county entered into a floating-to-floating or basis swap on about $125.8 million of its outstanding fixed-rate Series 2000, 2001, 2002A and B and 2004A and B GOs. The guarantor was Ambac Assurance Corp., which Quick noted had been downgraded to AA from AAA by Fitch. He added that officials were content that the rating for Ambac is still triple-A from Moody's and Standard & Poor's.
Quick also reported that despite the turmoil in the markets related to the transactions, Durham County's swap is doing well. In fact, he said the county this month is expected to receive its largest payment yet under the agreement. About $930,000 is expected, and so far, since the transaction was inked, the county has received $3 million, he said.
