Henrico County plans to bring $95.8 million of general obligation public improvement bonds to market in a competitive deal Tuesday, but finance director John Vithoulkas said that decision could change on Monday afternoon because of ongoing market instability.
“Our thoughts are probably similar to just about anybody else’s right now,” Vithoulkas said. “Until we see some other transactions go through, we’re likely to hold off on Tuesday. If we had to decide today, we probably would not go.
“We hope to be on for Tuesday. We hope things in the market improve sufficiently,” he continued. “But if they don’t, we have the ability to step back and hit 'pause.’ ”
The proceeds of the bonds will finance school capital improvement projects, fire stations, recreation and park facilities improvements, and road projects, according to the preliminary official statement.
Vithoulkas said that county projects would not suffer if the deal is postponed.
Hawkins Delafield & Wood LLP is bond counsel. BB&T Capital Markets is financial adviser.
Fitch Ratings and Moody’s Investors Service both affirmed the Henrico’s triple-A rating ahead of the deal. As of press time, Standard & Poor’s had yet to release an updated rating, but it currently rates the county AAA, as well.
Fitch credited “very strong” financial management, high reserve levels, and detailed planning as reasons for the triple-A rating. Officials project that about $153 million of authorized but unissued debt will be bonded by fiscal 2012. The county’s fiscal 2009 to 2013 capital improvement plan is $1.7 billion, and pay-as-you-go financing makes up 63% of planned revenue sources.
Henrico hasn’t issued debt since November 2006, when it sold $73 million of GO public improvement bonds to Goldman, Sachs & Co. at a true interest cost of 3.9572%.
Other Virginia issuers have canceled deals as liquidity in the primary municipal market has been all but frozen due to overall market upheaval.
Norfolk postponed about $17 million of GO capital public improvement refunding bonds on Sept. 24 and put them on the day-to-day competitive calendar, while a $67.3 million competitive deal for the Virginia Public School Authority was canceled on Sept. 25.