ATLANTA - Cobb County, Ga., will be in the market today with an $87 million tax anticipation note deal that will cover cash-flow needs for the second half of its fiscal year.
The notes will be sold competitively with Wachovia Securities LLC as the financial adviser and Butler Snow Jackson PLLC as bond counsel. The notes mature on Dec. 31, 2008.
Moody's Investors Service assigned its MIG-1 rating. Fitch Ratings and Standard & Poor's are also expected to rate the deal.
Brad Bowers, the finance director for the county, explained that Cobb traditionally issues Tans in the first half of the year and then takes them out in the fall when property taxes come in.
The county receives most of its property taxes between September and December. About 67% of the Tan proceeds will be used for general fund expenditures and the remaining 33% will be used for Cobb's fire district.
This is the largest Tan borrowing from the county in the last five years, which partially reflects the Cobb's growth. It is located north of Atlanta and its population has steadily increased over the years.
Moody's analyst Baye Larsen wrote in the rating report for the deal that the growth has contributed to steady expansion of the property tax base, which has averaged 6.6% annual growth in full property values during the past five years.
"Moody's expects the county's sizeable, mature tax base to continue to expand given its diverse local economy, modest ongoing population growth, and its proximity to the city of Atlanta," Larsen wrote.
That growth is expected to taper off in the coming years, however.
In the meantime, investors will have a chance to pick up some long-term debt from the gilt-edge credit. Bowers said that a $15 million general obligation bond deal could price for parks by the end of the year. It is from a $40 million authorization approved by voters in 2006. Last year the county sold $25 million from that authorization.
Opportunities to invest in Cobb County, which is a relatively infrequent borrower, will continue in the coming years as it funds a five-year, $549 million capital improvement plan.
The county's budget is roughly $335 million and Bowers said that most revenue sources are faring well despite the economic slowdown. The main exception is those that are associated with development, such as building permit fees.
