Henrico County last week sold Virginia's first recovery zone economic development bonds in a $9.8 million deal.
The bonds were rated AAA by Standard & Poor's and Fitch Ratings, while Moody's Investors Service rated them Aa2.
Recovery zone economic development bonds offer qualifying issuers a 45% subsidy for their taxable interest costs.
The bonds received a true interest cost of 3.387% with the subsidy, compared to 6.14% without the subsidy, said Dianne Klaiss, first vice president at Morgan Keegan & Co., which priced the bonds.
The $9.8 million deal represented Henrico's total allocation of RZEDBs. The offering included $22.9 million of refunding bonds that retired variable-rate debt for fixed-rate bonds.
Hawkins Delafield & Wood LLP was bond counsel. BB&T Capital Markets was the financial adviser.
Virginia was allocated a total of $104.4 million of RZEDBs and $156.6 million of recovery zone facility bonds.
More issuers are hoping to tap the $384.5 million of RZEDBs allocated by the American Recovery and Reinvestment Act since the program began in June, but only $42.2 million had been sold in eight issues nationally through Tuesday, according to Thomson Reuters.
