County saves $4.6 million by refinancing bond debt

April 05, 2006|By JULIE SCHARPER | JULIE SCHARPER,SUN REPORTER

Anne Arundel County saved $4.6 million by refinancing $121 million of debt at a better interest rate, County Controller William R. Brown Jr. said last week.

Each spring, the county sells bonds to pay for improvements and pay off old debts, Brown said. This year, the county sold $206 million in general obligation bonds in a contract with UBS Securities LLC.

Of the $85 million in new debt that the county took on, $66 million will go for general improvements for the county and $19 million will be allocated to water and sewer maintenance, County Executive Janet S. Owens announced in a statement. Nearly $42 million of the $85 million will be used to pay off bond anticipation notes - a temporary debt that Brown likened to a home improvement loan.

In 2005, the county issued $80.5 million in new debt and refinanced $73.1 million, Brown said. Three rating agencies - Standard & Poor's Rating Group, Moody's Investment Service and Fitch Ratings - gave the county's bonds the second-highest scores possible.

"We have all of the attributes of a Triple-A rated jurisdiction, but we have a tax cap that voters put in place years ago," Brown said, explaining why the county did not receive the highest rating. "Lending agencies don't like to see any caps at all."

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