FLORENCE COUNTY OBTAINS NEW CREDIT RATING
In February 2021, the County set out to attain updated credit ratings which proved to be a huge success. The County’s bond ratings were affirmed by both Moody’s and Standard & Poor’s (S&P Global) at Aa2 and AA, respectively. The rating agencies take into consideration a variety of factors, including financial ratios, the strength of our local economy and the overall financial health of the County. These independent evaluations of credit worthiness are even more impressive given the financial turmoil created by the COVID pandemic.
COUNTY ISSUES BONDS TO FUND A PORTION OF CPST III PROJECTS
It also gives us great pleasure to inform you that the County’s efforts to capitalize on the market and expedite the sale of the bonds for the CPST III was a tremendous success. On February 25th, Florence County sold $120 million of General Obligation Bonds which was well received by the market, with seven (7) different investment banking organizations submitting bids to purchase the bonds. Morgan Stanley & Co LLC was the winning bidder, offering a premium in the amount of $22 million to purchase the bonds which resulted in a true interest cost of less than 1%. The County has already received the bond proceeds and begun implementing projects approved by voters on the referendum in November 2020. SC law requires the $22 million premium to be used by the County to pay debt service on the bonds. The net amount of interest paid by the County
over the life of the bonds will be only $4 million ($26 million of interest payments minus $22 million of premium). The premium has also been received and deposited in a debt service account to make the first payment on the bonds. The high credit rating enabled the County to once again save the taxpayers money while continuing to progress with the Capital Project Sales Tax III projects.
COUNTY REFINANCES BONDS TO PROVIDE SAVINGS
On April 7, 2021, $37,870,000 of bonds were offered to investors with Wells Fargo serving as the underwriter for the bonds. They received over $160 million in orders from approximately 20 different investors. The strong demand for the bonds allowed Wells Fargo to lower the interest rates on almost every maturity with 10 maturities having interest rates lowered by 5 basis points. The refinancing resulted in a total savings (net present value) to the County of $1,895,000. This equates to annual savings of approximately $152,000 per year for the next 15 years.