SNOW HILL – Waiting six weeks to sell a series of bonds to fund a high school renovation project saved Worcester County over $1.3 million in interest costs over the life of the bonds.
The Worcester County Commissioners sold $35 million in bonds Tuesday to UBS Financial Services to fund the county’s share of the renovations and improvements to Pocomoke High School.
Instead of the 4.4-percent interest rate seen in municipal bond sales earlier this month, Worcester County sold the multi-million dollar bond series at an interest rate of 3.99 percent.
“It’s an indication of how well this county is regarded,” said county bond sale representative Sam Ketterman of Davenport and Company.
This interest rate matches the 4-percent interest rate projected by county financial staff earlier this year. Interest rates in early October, when the bonds were originally slated for sale, had climbed to 5.5 percent, prompting the County Commissioners to postpone the sale.
“The county regained its bond rating,” said county administrator Gerry Mason. “The bond rating is a determining factor in what the interest rate should be.”
Five bidders competed for the Worcester County bond, offering the lowest rate of 3.99 percent, up to a highest bid of 4.27 percent.
Earlier this month, a few days before the commissioners voted to go ahead with the delayed bond sale, the interest rate hovered at 4.4 percent.
The 3.99-percent interest rate actually achieved this week saves Worcester County $1.32 million over the 15-year life of the bonds, an $88,000 annual debt payment savings.
“The municipal market continues to improve,” said Ketterman.
Two municipal bond sales in Maryland in the last two weeks have shown the trend, with a bond sale by Cumberland, Md. garnering a 4.66-percent interest rate and a bond sale by Carroll County getting 4.36 percent.
“I thought that was outstanding at the time,” Ketterman said.
County Commissioner Judy Boggs was pleased to see the savings, praising the advice given weeks ago.
“That was great. Your strategy was right on the money, no pun intended,” said Boggs. “That’s why we listen to you.”
“It pays to be lucky,” Ketterman said.
The commissioners voted unanimously to approve the sale.
“Way to go,” said Commissioner Louise Gulyas.