DALLAS – Upheaval in the equities market and a flight to the quality of munis brought big savings on $112 million of Montgomery County, Texas, bonds, officials there said.
The Jan. 13 deal pricing $53 million of serial road bonds reaching final maturity in 2041 and $58.9 million of refunding bonds maturing in 2025 through 2032. The bonds were rated AA-plus by Standard & Poor's and Aa1 by Moody's Investor's Service with stable outlooks.
On the refunding, the county saved $9.76 million in net present value, said County Judge Craig Doyal, the chief administrative officer. On the new money bonds, the county will pay $17 million less in interest over the life of the bonds than expected.
The 2041 new money bonds drew a yield of 3.25% on 4% coupons. Maturities of 2025 with 5% coupons earned 1.91% or 17 basis points below 10-year Treasuries.
Doyal touted the savings as good news for the fast-growing suburban county north of Houston, where many are concerned about the impact of falling oil prices on a massive new Exxon Mobil campus.
"It is important for Montgomery County to take every possible opportunity to save taxpayer dollars on this road bond and our existing debt, and we were able to do so by having a strong credit rating when we went to market on these bonds," said Doyal.
"This is in keeping with our pledge to conservatively manage this road bond project and our debt to be accountable to our taxpayers and protect their interests, keeping costs as low as possible," he said.
The county's financial advisor John Robuck, vice president at BOSC Inc., told county commissioners that a selloff in the stock market accelerated a "flight to quality" in the muni market.
