Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the County Finance topic
No spam. Unsubscribe anytime.
Tazewell County approves Huntington Bank financing to refinance $3.2M and borrow $4M
Summary
The Tazewell County Board of Supervisors and the Industrial Development Authority approved a lease–leaseback financing with Huntington Bank, refinancing approximately $3.2 million of existing debt and issuing $4 million in new debt at a 4.12% fixed rate; advisors cited VRA market volatility as a reason to lock the private bid.
The Tazewell County Board of Supervisors voted March 16 to accept a private-bank loan from Huntington Bank to refinance roughly $3.2 million in existing debt and to borrow $4 million in new money, Board and Industrial Development Authority (IDA) members were told.
County financial advisers from Davenport recommended taking the private bid, saying public-market pricing from the Virginia Resources Authority (VRA) has been volatile and that Huntington’s 4.12% fixed rate with strong prepayment provisions offered certainty. "The volatility in those markets leads us to say, let's take the bird in hand, which is the private bank, Huntington Bank," said Kyle Louts, Davenport financial advisor.
Administrator Eric told the board the proposed structure would lower the county’s annual debt-service by about $240,000, improving cash flow to help pay for capital projects including a proposed leachate tank. "The structure as we have it with Huntington Bank would decrease the board's actual total debt service payment by about $240,000 a year," Eric said.
The financing will use a lease–leaseback structure in which the county leases property to the IDA, which assigns the lease to bondholders. As collateral the county will commit several properties, including the Bluefield branch of the Tazewell County Public Library and a recently acquired B & W Auto building; the county withdrew Raven Elementary as collateral after the bank asked that it carry flood insurance.
The board approved resolutions authorizing issuance of the debt and the lease-financing plan; Administrator Eric said identical exhibits prepared by bond counsel are included in the IDA resolution and both bodies will sign required documents before closing. Advisors noted VRA rates will not be known until VRA issues debt, so locking the bank bid removes market uncertainty but may leave an opportunity to refinance later if rates fall.
The board moved to approve the Huntington Bank bid, the motion was seconded and passed by voice vote. The IDA was instructed to take the same vote and to execute parallel resolutions. Chairs of both bodies are expected to sign financing documents prior to closing.
