Prince William County received a “AAA/stable” long-term rating Tuesday from Standard & Poor’s for its upcoming bond offering that will go toward building institutions of learning and upgrading existing campuses in the fast-growing school system.
The county’s $43.235 million bond sale, which will be July 19, also received AAA and Aaa ratings from Fitch Ratings and Moody’s Investor Service, respectively.
The bonds will cover construction-related costs for four schools: T. Clay Wood Elementary in Nokesville, Piney Branch Elementary in Bristow and Ronald Reagan Middle School and PACE West in Haymarket. Wood and Piney Branch are complete and will open in September. The county held groundbreaking ceremonies for Reagan and PACE this year, and they are slated to open next year.
The bonds will also finance classroom additions at several schools, a bus parking lot at Gar-Field High School in Woodbridge and design work for future school facilities.
Bonds sold through the Virginia Public School Authority, a unit of the state treasury that provides financing options for public schools, are usually pooled together from several jurisdictions that might have different credit ratings. This year, the county will be the only jurisdiction to offer bonds through the authority’s stand-alone policy. The policy requires issuers to offer $20 million in bonds and have at least an A rating from a rating agency.
Steven A. Solomon, county director of finance, said access to financing as a stand-alone jurisdiction allows the county to respond promptly to the need for more school facilities.
“Because of the growth in Prince William County, we have a demand,” he said. The offering “allows us to act rather quickly.”
Corey A. Stewart (R-At Large), chairman of the Prince William Board of County Supervisors, said the high ratings would attract investors and allow the county to borrow money for much-needed school construction at the most competitive rate.
The bond funds “will allow our residents to continue enjoying the high quality of life they have come to expect at the lowest cost available,” he said in a statement.
County officials said that they did not know the exact amount the county would save by having a higher credit rating, because they didn’t know what rate they might get on the upcoming bonds offering. But even an interest rate lowered by .25 percent on a hypothetical 20-year $50 million bond could yield significant savings over time.
With this rating, Prince William joins Arlington County and 34 other counties in the country to have received the highest rating from each agency.
Connie Vaughan, a public finance analyst with the authority, said that because most jurisdictions are not eligible for the lowest interest rate, “it’s typically cheaper for them to get in a pool.”
The county’s bond offering comes as municipal bonds across the country have fallen by about half of last year’s volume. The Bond Buyer, a daily newspaper that reports on public finance, wrote that for the first six months, volume was down about 44 percent and that about $115 billion in municipal bonds have been issued through June, compared with $205 billion over the same period last year.
The county issued more than $56.9 million in bonds last year for public improvement projects, including road work along Route 1 between Joplin and Bradys Hill roads.
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