County’s bond-selling gets a boost from Web
The unglamorous process of selling county bonds perked up a little this week when the county borrowed money on line for the first time ever and Moody’s Investor’s Service upgraded the county’s rating.
On Tuesday, the county sold $10 million in general obligation bonds on http://www.muniauction.com. The service allows counties and cities to sell bonds to investment firms, a popular process for governments looking to borrow money.
In Pitkin County’s case, four firms bid on the right to sell the bonds by naming their interest rates and costs over a half-hour period from 11 to 11:30 a.m.
The lowest bid came from Piper Jaffary Inc., which offered to loan the $10 million to the county at 5.3543 percent interest. Hanifen, Imhoff came in with an offer of 5.3856 percent. The difference represents several thousand dollars.
Investment banks and brokers were likely spurred to bid on the county bonds by a Dec. 1 press release from Moody’s. The rating agency upped the county’s risk rating from A2 to A1, which means it believes Pitkin County is a safe place to invest money.
“The upgrade reflects a decade of strong finances, a sound 25-year history of sales tax revenue collections, a modest debt profile and a sizable affluent, albeit tourist-based, economy,” says the press release from Moody’s.
With the new debt, the county has borrowed just under half of the total amount of money it’s allowed to borrow under state law, according to a memo written by county finance director Tom Oken.
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