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Posted on: October 15, 2020

Loudoun County Sells Refunding Bonds at Favorable Interest Rate

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Loudoun County has completed a bond sale with proceeds from the sale of general obligation (GO) refunding bonds going into escrow to pay off outstanding refunding bonds and public improvement bonds. In advance of the sales, the nation’s top bond rating agencies reaffirmed the county’s AAA rating on its general obligation bonds, and the high AA+ and Aa1 rating on its lease revenue bonds.

On Wednesday, Loudoun County sold $75.2 million in GO refunding bonds at a favorable interest rate of 0.44 percent. The county received $12.5 million in premium, which was used to reduce the par amount of the bonds, and all of the proceeds will go into escrow to pay off the outstanding Series 2010A GO refunding bonds, and the Series 2011A GO Public Improvement Bonds. Because the bonds were refunding outstanding maturities from 2021-2030, the refunding bonds have a final maturity of 10 years, thus contributing to the low rate, in addition to the county’s high AAA/Aaa rating. The 2010A bonds, will achieve savings totaling $9.6 million over the next seven years; and the 2011A bonds, will achieve a savings totaling $3.4 million over the next ten years. Six bidders submitted offers for the county’s bonds. Citigroup Global Markets, Inc. offered the bid with the lowest interest rate, which the county accepted. 

Earlier this month, the nation’s top bond rating agencies reaffirmed the county’s AAA rating on its general obligation bonds, and the high AA+ and Aa1 rating (AA+ by Fitch and S&P Global and Aa1 by Moody’s) on its lease revenue bonds. The ratings agencies noted the county’s operating performance and sound reserves, even during the pandemic, and sizable and diverse tax base, and moderate long-term liability burden. Loudoun County has held the Aaa rating from Moody’s since 2004, and AAA from Fitch Ratings and S&P Global since 2005. A high bond rating helps the county achieve the best possible interest rates to finance capital projects, saving taxpayers millions of dollars. 

More information on Loudoun County finances and its triple-A status is online at loudoun.gov/BondRatings. 

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