Friday, Oct. 10, 2008

Fairfax County Has One of the Country’s Largest Municipal Bond Sales Despite the Credit Crisis

Despite the ailing credit market in recent weeks, the Fairfax County Redevelopment and Housing Authority sold a $105 million bond anticipation note (BAN) to Banc of America Securities LLC, the investment banking subsidiary of Bank of America. The interest rate of 2.594 percent was excellent and a reflector of the high quality of Fairfax County credit.

This BAN sale represents one of the largest municipal bond sales in the U.S. in the last two weeks. The low interest rate obtained reflects the high regard for the County in the marketplace. The BAN was rated at the highest possible level for short-term notes by Standard & Poor’s and Moody’s Investor Services.

“This is a clear vote of confidence in the financial health of Fairfax County from the marketplace,” said Board of Supervisors Chairman Gerald E. Connolly. “Given the unprecedented volatility of the marketplace in the past two weeks, the Board of Supervisors acted in a fiscally responsible manner to protect the county’s AAA bond rating, which has saved more than $360 million during the past 33 years.” 

This BAN is for the rollover of a BAN issued in November 2007 to finance the acquisition of Wedgewood Apartments, which will preserve 672 units of affordable housing in Fairfax County as part of the Board of Supervisors’ Preservation of Affordable Housing initiative.

The sale will save the county money since the 2.5% interest rate represents a decrease of 72 basis points from the 3.318 percent rate currently paid on the existing note.