Officials announce $15 million bond sale

NORRISTOWN » The Montgomery County commissioners received two pieces of “exciting” news regarding the county’s financial health at a recent meeting.

First, county CFO Dean Dortone announced the successful completion of a scheduled bond sale that took place on Oct. 4. Then came word of the possibility that the county could soon receive an upgraded credit rating.

In total, $15.46 million in general obligation bonds were sold — of which $10.85 million are Series C nontaxable bonds and $4.58 million are Series D, federally taxable bonds.

The Series C bonds will be used to finance a portion of the current refunding of the county’s bonds

issued in 2007, fund the acquisition of the Norristown parking garage in the first block of East Main Street, generate debt service savings and cover the cost of issuance.

In addition to financing

some of the refunding of the 2007 bonds and covering the cost of their issuance, the Series D bonds will finance economic development program grants to the Montgomery County Economic Development Corp.

The bonds were sold through a competitive online bidding process that drew “strong interest” among several underwriting

firms, with seven banks ultimately submitting bids, according to officials.

The winning bid came from Janney Montgomery Scott LLC at a true interest cost of 2.73 percent.

Dortone thanked the county’s economic team for doing “a great job of putting this transaction together” through evaluations that took place over the course

of several months.

“It’s a real positive outcome,” he said. “This means savings to the taxpayer. With the two refis, we’re able to save $4 million over the next 20 years versus the debt service that was outstanding. And then we refi’d it with low-interest rate debt, so I think the bottom line is, it’s savings.”

The credit rating firm Moody’s also reaffirmed Montgomery County’s Aa1 rating and upgraded the county’s outlook from positive to stable following a Sept. 18 meeting with county officials.

Moody’s listed several factors in the decision, including the sizeable and diverse tax base of the Philadelphia metropolitan

area; the county’s healthy cash and reserve level; substantially improved financial position through fiscal 2016; above average wealth indicators; low debt burden; and a manageable pension liability.

The agency also indicated that if the county continues to perform at current levels, its credit rating could be upgraded to Aaa.