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Kerr County sells tax notes for road and equipment needs, and approves refunding bonds to save $452K over life of debt
Summary
Kerr County sold tax notes to finance road improvements and equipment and approved a refunding bond that will lower interest costs, with officials citing a recent AA rating and favorable market conditions.
Kerr County Commissioners on Tuesday approved two debt transactions: the issuance and sale of new tax notes to fund road work and equipment, and a limited tax refunding bond that will refinance outstanding debt and produce net savings.
Financial advisor Dusty Traylor of RBC Capital Markets reported the county sold tax notes with $2,750,000 in principal, producing a project deposit of $2,000,008.25 for items identified in the county—s plan (including Al Mooney Road and Road & Bridge equipment). The tax notes carry a seven-year final maturity as required by state law and a final interest rate of about 4.169% (tax-exempt yield ~3.533%). The court approved the sale to lock in rates and directed staff to complete required attorney-general review and closing steps, with funds anticipated to be delivered June 24.
Traylor also presented a limited tax refunding bond issuance structured to refinance a portion of the county—s outstanding limited tax bonds from 2015. He said the refunded bonds had an average interest rate near 5% and the refunding bonds carry an interest rate of about 3.944%, yielding $452,023 in net savings over the remaining life of the refunded debt and a present-value savings of about $394,000 (roughly 5.04% of refunded par). The court unanimously approved the refunding issuance.
Judge Kelly and commissioners praised staff work and the county—s double-A S&P bond rating, which Traylor noted helped achieve favorable pricing in both transactions.
