Baird of Red Bank, N.J., was the winning bidder among 12 firms that bid on the sale of $25 million in general obligation highway department bonds.
Financial advisor Sean Lentz of Ehlers Public Finance Advisors announced the news at a Thursday morning meeting of the Barron County Board of Supervisors. He said the bonds sold at a premium, which was more than the asking price and helped calculate the interest rate to 1.5359%.
Lentz congratulated the county for doing an excellent job with all the components in its control that go into a bond rating.
“The county has had an excellent bond rating and has maintained an AA rating,” he said. He explained that only better is a AAA rating which includes a county’s size, wealth and a diverse tax base, all not in their direct control.
He said the county’s rating attracted bidders from all over the country, not just the Midwest.
“It was very competitive,” Lentz said.
Other bidders included Raymond James & Associates of St. Petersburg, Fla., offering an interest rate of 1.5433%; Huntington Securities of Chicago, Ill., at 1.5501%; Wells Fargo Bank, National Association of Charlotte, N.C., at 1.6019%; The Baker Group of Oklahoma City, Okla., at 1.6143%; Piper Sandler & Co. of Minneapolis, Minn., at 1.6458%; J.P. Morgan Securities LLC of New York, N.Y., at 1.6589%; Bankers Bank of Madison at 1.6613%; Citigroup Global Markets of Dallas, Texas at 1.6682%; Mesirow Financial of Chicago, Ill., at 1.6954%; Bank of America Merrill Lynch of New York, N.Y., at 1.6984%; and Hilltop Securities of Dallas, Texas, at 1.8445%.
Lentz said the amount between the lowest and highest bids, 1.5359%-1.8445%, translates into a million dollar savings for Barron County.
“It benefitted you very well, with a million dollars less in interest over the life of the bond,” he said.
With the 1.5359% interest rate locked in, payments in the years 2023-2040 will be $1,580,000 a year.
That is less than the county’s existing debt, with payments of a little less than $3 million a year, that will end in 2022.
Lentz said at that time the debt levy will drop, or other projects can be added to the debt without causing the debt levy to go up.
Prepayment, an option to pay off the bond faster, is an option that will be available starting in November 2028.
“We are hitting the market at a really good time for tax-exempt, long-term bonds,” Lentz said.
Supervisor John Banks asked what happened to the local financial institutions that were interested in bidding. Lentz replied that $25 million was a little more than any of them wanted to absorb.
He said Baird has a long list of syndicates and that it is likely it will reach out to local banks to see if they are interested in buying some of the bonds.
The sale of the bonds was approved by 28 supervisors with one absent.
Two other resolutions were approved by the same number. One authorized the highway facilities rebuild, and the approved Ehlers as investment manager for highway bond proceeds and disbursement of funds.