Low Interest Rates on Bond & Note Sales

Posted on October 9, 2019

Somerset County Freeholder Director Brian D. Levine has announced two recent county note sales that garnered interest rates of just over 1%.

The first was a one-year note for $40 million at a rate of 1.15%. This note is funding road resurfacing and reconstruction, bridge maintenance, and various vehicles and equipment. The successful bidder was Bank of America Merrill Lynch.

The second was a one-year Somerset County Improvement Authority note for the Montgomery Township Municipal Complex project, for about $14.725 million, which received a rate of 1.16% and saved the township over $145,000 compared to last year’s rate. The successful bidder was Powell Capital Markets.

“These are the lowest rates we’ve seen in over three years,” Freeholder Director Levine said. “The low rates are primarily due to our triple-A rating from Moody’s and Standard & Poor’s, and the fact that the federal government has not increased short-term rates since 2018.

“To give you a better understanding of the savings, on the $40-million note we will be paying nearly $100,000 less in interest costs next year on a note that is nearly $12 million more than last year’s,” he said.

Somerset County also sold $21.5 million in general obligation bonds and received an interest rate of 2.19% over 16 years. These funds will be used for road and bridge projects and equipment as well as projects at Raritan Valley Community College and the Somerset County Vo-Tech Schools. The successful bidder was CitiGroup.

Freeholder Deputy Director Patricia Walsh and Freeholder Sara Sooy, members of the county’s finance committee, commended the hard work and dedication of the county finance staff – led by Chief Financial Officer Nick Trasente and Director of Fiscal Operations Yvonne Childress – as a key factor in the successful bond and note sales.

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Source: Somerset County Office of Public Info