The Union Recorder

Local News

June 20, 2013

County refinancing water debt

Raymond James selected as underwriter

MILLEDGEVILLE — After reviewing proposals to refinance the current Baldwin County water fund debt Tuesday, the county commissioners chose Raymond James (RJ) as the underwriter.

The board voted 3-2 to accept the firm with Tommy French, District 2, and Emily Davis, District 1, against the motion.

Milledgeville native and RJ First Vice President Tom Owens made a better presentation, according to District 4 Commissioner Henry Craig.

“They have been around longer, have more facilities and they are a larger organization that would be able to give us more flexibility as we move forward,” Craig said.

Considering Raymond James and Merchant Capital provided similar proposals, Commissioner Sammy Hall, District 3, said it came down to who which company county officials felt most comfortable with.

“It’s not a nickels worth of difference between the two,” Hall said Tuesday. “We are going to decide how we structure it in the best interest of Baldwin County.” 

The county wants to refinance the current water debt to receive a savings.

Owens presented three options with these directives in mind:

• Refinance all outstanding water-related debt;

• Produce the greatest amount of savings;

• Pledge only water revenues to the refunding bonds;

• Shortening the debt is allowed to achieve these goals;

The county can choose the private placement offering or the rated public sale route.

• 15-year, Non-rated, Private Placement

RJ sees this option providing the max savings.

All five series of existing debt would be refinanced with a single refunding issue. By shortening the term of existing USDA bonds, the county would save interest costs since the private placement eliminates the last 10 years of debt service.

Annual payments would be less than the current highest payment on all existing debt. Bonds would be sold to one or a collection of banks through non-rated transactions. 

Though a projected 2.90 percent interest rate isn’t quite as good as a public offering, the private placement structure could front load the gross savings or spread out the principal.

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