Bond Sale Saves Money

Wake County's excellent bond rating saved taxpayers nearly $5.6 million in interest on a $91.145-million general obligation bond issue this week. The bonds comprise $8-million Criminal Justice Facilities Bonds and $83.145-million Refunding Bonds.

The Wake County Board of Commissioners authorized the criminal justice bonds based on the construction schedule prepared by the County's Facilities Design and Construction Department. Voters in a 2000 referendum previously approved the authorization for these funds. With this sale, there will remain $12 million of authorized/unissued bonds to provide additional funding for construction at the Hammond Road detention facility.

The criminal justice bonds sold at a net interest cost of 4.02%, or 98 basis points below the Bond Buyers Index of 5.00%, resulting in a savings of approximately $788,000 for Wake County taxpayers. The index is an indicator of interest costs for municipal bonds sold nationwide. The Refunding Bonds sold at a true interest cost of 2.6185%, which will save County taxpayers approximately $4.8 million, for a total interest savings of $5,588,000 over the life of the bonds.

"We are pleased with the results of this bond sale," Wake County Finance Director Cam Frazier said. "The total savings on the overall bond interest cost is a direct result of the County's triple-A ratings, which reflects sound fiscal oversight by the County Commissioners."

The country's three largest municipal bond rating agencies reaffirmed the County's triple-A rating for the bond sale. The County has received the highest possible rating from Moody's since 1973, from Standard & Poors since 1983 and from FITCH since 2000.

General obligation bonds are backed by the full faith and credit of the County, which means that the repayment of the bonds is guaranteed by the County's taxing authority.