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DeKalb approves up to $433 million water and sewer bonds; Jefferies wins competitive sale with 4.65% true interest cost
Summary
The county awarded a competitive bond sale to Jefferies for its water-and-sewer revenue bonds after Moody's and Fitch affirmed ratings; closing is scheduled next week and bond proceeds will fund the county's capital plan and pay short-term notes on Sept. 1, 2025.
The DeKalb County Board of Commissioners voted Aug. 12 to authorize the issuance of water and sewer revenue bonds that will fund the county's capital program and replace short-term notes due Sept. 1.
Financial adviser PFM and county bond counsel reported the county received five competitive bids that morning. Jefferies submitted the winning bid with a true interest cost (TIC) of 4.654 percent; the final par amount to be issued is about $433.1 million, below the board's not-to-exceed authorization of $450 million.
Elise Lamon of PFM told the commission the sale followed earlier steps this spring — validation of the bonds by the superior court and rating-agency calls in June — and that Moody's and Fitch affirmed the county's ratings (Moody's assigned a negative outlook; Fitch assigned a stable outlook). Lamon said the bond sale produced highly competitive pricing: the difference in TIC between the top and bottom bidders was fewer than six basis points.
"Based on the foregoing and our knowledge in the issuance of tax-exempt debt, it is our recommendation that we award the bonds to Jefferies," Lamon said during the presentation. Tom Loth, bond counsel, described the supplemental resolution as setting the final principal amortization and interest terms within the parameters the commission previously approved.
Under the financing plan presented, the bonds will close next Thursday and the county will use proceeds to pay down water-and-sewer anticipation notes on Sept. 1. The bond documents will include routine cost-of-issuance items such as counsel, financial advisor and rating-agency fees, and the underwriter discount.
County officials said the sale's proceeds support large capital needs in the county's water and sewer system, including upgrades required by the county's capital-improvement plan. Commissioners approved the supplemental resolution and bond award during the business meeting; staff said a pre-closing will be held next Wednesday and the formal closing next Thursday.
