Mecklenburg County is expected to sell $90.8 million of certificates of participation next Wednesday.
The Series 2009A certificates mature from 2010 to 2029 and are rated Aa1 by Moody’s Investors Service and AA-plus by Standard & Poor’s and Fitch Ratings. BB&T Capital Markets and Wachovia Securities LLC will serve as underwriters. Robertson, Bradshaw & Hinson PA will be bond counsel.
The sale will finance improvements at two schools and other government facilities.
Mecklenburg has $1.76 billion of triple-A rated GOs outstanding and $518 million of COPs. Investors are repaid by receiving a share, or participation, in the lease payments from a particular project.
Mecklenburg, the home of Charlotte, is the second-largest financial center in the U.S., with more than 85,000 finance-related jobs produced by institutions with $3.3 trillion in assets, according to Fitch. Financial strength is expected to stay strong after the recent acquisition of Wachovia Bank by San Francisco based-Wells Fargo & Co., Fitch said.
The county revised its debt policies in the summer of 2008 ahead of “sizeable upcoming capital needs,” Fitch said. Mecklenburg is expected to sell $253 million of GOs in March. The new debt policies cap unhedged variable-rate debt exposure at 35% and set no cap for synthetically fixed-rate debt, which Fitch said could be “potentially weakening the county’s debt profile.”
Mecklenburg’s debt levels are $4,321 per capita or 3.9% of market value, which are “still moderate but are inconsistent with such a highly rated credit,” Fitch said, adding that the debt levels will rise if the March GO sale proceeds.
The county’s debt service reached 17.7% of expenditures in fiscal 2008, Fitch said.