def #146 07/28/10
BOND SALE BRINGS IN BEST RATES;
COUNTY TO SAVE ABOUT $2.1 MILLION
TOMS RIVER - With a bond rating that is now at the highest grade possible - AAA - combined with Ocean County's continuing conservative approach to
finances, a recent bond refunding will net the county $2.1 million in savings.
"We are very pleased with the outcome of this bond sale," said Freeholder John C. Bartlett Jr., who serves as liaison to Ocean County's Finance
Department. "We have garnered the lowest interest rates possible and this comes with a significant savings to the county."
During an online Internet bond sale held July 27th, Ocean County locked into an interest rate of 2.34 percent on the refunding of $43.8 million
in bonds that were issued in 2001, 2002, and 2003. The successful bidder was Hutchinson, Shockey, Erley and Co. of Chicago. The company was one of nine
Bartlett noted that the refunding will not extend the life of the bonds, which maximum term is 13 years, but helps the county secure better interest
rates and a savings, similar to a homeowner refinancing their home mortgage.
"The state requires the county to net at least a 3 percent savings when you refund bonds," Bartlett said. "The county not only met the 3 percent but
exceeded it by reaching a level of savings at 5.76 percent."
The bonds had been used, in part, to finance the construction of Freedom Fields County Park in Little Egg Harbor Township, the expansion of the
headquarters of the Ocean County Library system in Toms River, the expansion of the emergency 911 system in the county, Garden State Parkway interchange
improvements and other road and capital projects.
"These projects are brick and mortar projects, they will be used for a very long time," Bartlett said.
The county also offered $31 million in general obligation bonds for sale and received an interest rate of 2.955 percent. The maximum term of the
general obligation bonds is 20 years. The successful bidder on the issue was the Bank of Montreal Capital Markets. Ten bids were received.
Bartlett said these bonds were sold as Build America Bonds, which provide for a 10-year tax exempt period and a 10-year taxable period with the county
receiving 35 percent of the interest as reimbursement from the federal Build America Bonds subsidy.
The $31 million is used to support a number of capital projects throughout the County including bridge work, road work, park and infrastructure upgrades.
Bartlett noted that the county, in 2010, paid off $34 million of its debt.
In addition, a $1.1 million bond issue to be used for infrastructure upgrades and improvements at Ocean County College garnered a 1.09 percent interest
rate for five years. Three bids were received and the successful bidder was Janney Montgomery Scott Inc. of Philadelphia. These bonds are issued by the
county on behalf of the state of New Jersey and the college and the state pays half the interest and principal.
"These are some of the lowest interest rates we have ever been able to secure," Bartlett said. "This was the first refinancing to take place with the
county's new bond rating of AAA. It has made a beneficial difference."
Bond rating houses Moody's Investors Service and Fitch Ratings have both given Ocean County a AAA bond rating. Bond ratings range from Baa, the lowest,
to AAA, the highest possible. The AAA bond rating comes with benefits including better interest rates and the potential for a greater market of
competitors interested in purchasing the county's bonds.
"Securing these favorable low interest rates on these bonds is a testament to the continuing work of Freeholder Bartlett and the Board of Freeholders in
making certain Ocean County's finances are in good shape," said Freeholder Director James F. Lacey. "I also want to thank Julie Tarrant, our chief
financial officer, in making certain we received the best rates possible."