Westchester County, N.Y., plans to competitively market $173.1 million of general obligation bonds tomorrow in its first new-money deal since Republican Robert Astorino was elected county executive in November. The deal will also be the first marketed in the state under a pilot program allowing Westchester to accept only electronic bids.
Most of the deal will be sold as tax-exempt bonds. Though a final decision whether to market a small portion of the deal to finance water and sewer projects as taxable Build America Bonds will be made today based on market conditions. County finance commissioner Anne Marie Berg was optimistic that the county would go ahead with its first BABs issuance.
“We’re doing a very small piece of it with the BABs because that’s the only [series] that made sense on the long term projects,” Berg said. For most projects being financed, periods of probable usefulness were short and would not show any savings if sold as BABs, she said.
The triple-A rated county typically sells new-money bonds once a year to finance various capital projects.
According to the preliminary official statement, the bonds will be marketed as tax-exempt Series 2010B bonds with a par of $130.1 million; tax exempt Series 2010C-1 with a par of $20.8 million; and of BABs or tax-exempt Series 2010C-2 with a par of $22.2 million.
Public Financial Management Inc. is financial adviser on the deal.
Hawkins Delafield & Wood LLP is bond counsel on the B bonds, which have maturities out to 2022. Fulbright & Jaworski LLP is bond counsel on the C-1 bonds, which will have maturities out to 2019, and the C-2 bonds, which have maturities out to 2040.
The county will accept bids only through Ipreo’s Parity electronic bid system — the first such deal for a state municipality under a three-year pilot program enacted last year. If deemed successful, the practice could spread to the rest of the state. With the exception of Westchester, state law requires that municipalities accept paper bids on bond deals.
Though the pilot program allows for open auctions in which bids are ranked as they come in, this deal will be done through closed auction.
“I like to take small steps,” Berg said.
Berg began her new post last month after having served as comptroller in two Westchester towns — Eastchester and Mount Pleasant — for a total of 17 years.
Westchester has sold $816.7 million of new-money bonds and refunded $149.2 million of bonds since 2000, according to Thomson Reuters. The county has $814.1 million of debt outstanding, according to the POS. It also guarantees $113.2 million of the Westchester County Health Care Corp.’s debt.
The county, immediately north of New York City, is among the most affluent in the nation.
Fitch Ratings cited the county’s “exceptionally wealthy tax base,” historically strong financial management practices, modest debt levels, and “manageable” future capital needs as reasons for rating the county AAA with a stable outlook.