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Montgomery Finance Chief Riding Out Market's Storms
Jennifer Barrett watches over Montgomery County's finances.
(Courtesy Of Montgomery County - Courtesy Of Montgomery County)
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"We have had some nervous investors. Some were saying, 'Thank you, I'd like my money back,' " Barrett said. Her staff would then turn to liquidity providers to make good on the deal so the county would not have to put up its own cash. In one instance, a backstop bank had to come up with about $20 million to make good on some "puts" when the overnight interest rate was up to 9 percent. The next day it was down to 5 percent. The county actually saved money on that deal, Barrett said, because the backstopper, not the county, had to front the money.
Montgomery has benefited from some other lucky timing. Barrett's staff issued $250 million in long-term bonds in July, an annual offering that allows the county to borrow money to pay itself back for money already spent. Another short-term deal for $150 million went out in September, before things went awry on Wall Street.
"We were just a week ahead of the problems at Lehman," Barrett said.
Maryland local governments also have the benefit of recent cash infusions from property taxes paid in September. The next payments are due by year's end, which will provide more cash to counties and municipalities.
Come spring, Montgomery will be looking for investors for as much as $500 million in bonds for transportation, smart growth, technology modernization and possibly housing.
Barrett is hopeful that the markets will have settled by then and investors will be looking for less risk and more stability. That should put government offerings at the top of the heap.
"We believe it will be an attractive investment," she said.
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