With a closing date just a month away, the Grady County Lake Authority and Board of Commissioners took action this week to refinance the series 2010 bonds issued for construction of the dam at Tired Creek Lake, which will result in overall savings to the county of $1,773,403.44.
Clifford (Bucky) Kimsey and Tom Owens of Raymond James & Associates were in Cairo Tuesday night to review the status of the refinancing with county leaders and members of the authority.
Kimsey reported that Moody’s Investors Service had rated the county’s credit rating at A1 the county’s interest rate on the bonds will be 1.39 percent on an all inclusive basis, which includes the costs of issuance.
Owens noted that the best rate the county had been offered with a private placement through bank financing of the debt was 2.16 percent and in July the best rate for the public market was 1.49 percent.
“Sometimes it pays to procrastinate,” Commissioner and Lake Authority member Ray Prince commented.
“We are very, very happy how everything turned out,” Owens said.
Kimsey thanked Grady County administrator J.C. (Buddy) Johnson III, and finance director Holly Murkerson for their work on the refinancing of the debt. He told commissioners “they would have been proud” of how Johnson and Murkerson responded to questions posed by the representatives of Moody’s in a recent conference call.
Owens said Raymond James typically recommends clients consider refinancing debt when a minimum of three percent all inclusive savings can be realized and in this transaction the county is realizing a 16 percent savings from the refinancing of the principal of $10,350,000.
The county’s bond counsel for this transaction was attorney Jon Pannell of Savannah. Pannell reported to the authority and county commission that the bond transaction must be validated in Grady Superior Court prior to closing and a tentative hearing date has been set for Oct. 15, just five days prior to the anticipated closing date of Oct. 20.
“I think I speak for everyone, this is a really good deal for the county and we appreciate what you’ve done for us. It turned out much better than we ever thought. I’m well pleased,” Commissioner Prince said.
“We just appreciate the opportunity to take this transaction to the market for you,” Owens said.
Grady County administrator Johnson said that there had been significant back and forth discussion throughout the process, but he said it was “as smooth a process as you could imagine” and he thanked Kimsey, Owens and Pannell for their work on the refinancing.
The county has worked with Raymond James for multiple bond issuances for the lake. The original 2010 bonds totaled $14,940,000 and a second set of bonds, $8,795,000, was issued in 2015 to complete the project, but much of that had to be invested in satisfying U.S. Army Corps of Engineers requirements for wetlands mitigation.