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County awards $28.165 million G.O. bonds to fund new public works facility after strong bidding
Summary
Blue Earth County sold general obligation capital improvement bonds to fund a new public works facility; 15 bidders participated, Huntington Securities won with a true interest cost of 3.7116%, and S&P assigned a AA+ rating.
Blue Earth County commissioners on Sept. 23 approved awarding the county's general obligation capital improvement bonds, Series 2025A, to Huntington Securities after a competitive sale produced favorable pricing and a strong credit rating.
The bonds will finance construction of a new public works facility and pay issuance costs. Christine Hogan, a municipal advisor from Baker Tilly, said the county sold bonds with a stated par in the sale process and that proceeds will be used for the project. The bonds will be repaid over 20 years and are supported by ad valorem (property tax) levies; they have an optional redemption date of Dec. 1, 2035.
Why it matters: the sale secures long-term financing to complete the county public works facility. Pricing and rating affect debt service costs and the county's fiscal outlook.
Sale details presented: Hogan said the market estimate just before sale showed a true interest cost (TIC) of about 3.8%; the winning bid produced a TIC of 3.7116. Fifteen bidders submitted proposals, an ‘‘exceptional turnout’’ in the adviser’s words; Huntington Securities submitted the winning bid. Pricing produced a premium (several million dollars) that allowed the county to reduce the par amount while still financing the $30 million project cost through a combination of premium and bond proceeds, Hogan said. The presentation noted coupons, yields and that earlier maturities produced premium.
Credit rating: the county engaged S&P for a rating as part of the sale process. Hogan said S&P issued a report highlighting strong gross county product per capita, historically stable finances, large reserves above the county’s formal policy (35–50% of expenditures), proactive financial planning and a manageable overall debt burden. The rating assigned was AA+, one notch below the highest grade, Hogan said.
Board action: after the presentation, a commissioner moved to award the bonds to Huntington Securities and the board voted to approve the resolution awarding the approximate $28,165,000 general obligation capital improvement bonds, Series 2025A, to Huntington Securities.
Context and caveats: Hogan noted the bonds are callable beginning Dec. 1, 2035, and that bond market conditions and premium influenced sale structure. Commissioners and staff discussed reserve use and the need to avoid using reserves to keep levies artificially low over time.
Ending: with the award approved, staff will complete closing and proceed with financing steps for the public works facility; details on final par, premium application and amortization will be included in bond sale closing documents.
