Top bond rating cuts county borrowing costs

Hamilton County's distinction as one of only two Tennessee counties with the top bond rating from Standard & Poor's Ratings Services paid off Wednesday.

The county priced nearly $28.4 million in bonds at an interest rate below 3.5 percent for most of the 15-year notes. County Finance Director Louis Wright estimates the county will save about $250,000 in interest payments through 2025 due to the lower rates achieved by its AAA rating this year from Standard and Poor's.

"These are very, very good rates," Mr. Wright said Wednesday after bond underwriters priced one tax-exempt and two taxable bond issues for Hamilton County government. "We had a good day."

In its county assessment last month, S&P upgraded Hamilton County's rating to its highest level. Williamson County, the state's richest, is the only other county among Tennessee's 95 counties with a AAA rating from S&P.

"The triple-A rating is a product of being fiscally conservative over time with our county finances and the favorable economic outlook for our region by the rating agencies," said Hamilton County Commissioner Richard Casavant, dean of the University of Tennessee at Chattanooga School of Business.

The bonds priced Wednesday will replace $23.5 million in bond anticipation notes issued a year ago to help fund Hamilton County's share of infrastructure improvements pledged to recruit Volkswagen to build an auto assembly plant in Chattanooga.

Dr. Casavant said the road, rail and other connections for VW "are an investment that will pay off many times over."

Amid the financial turmoil of the Great Recession a year ago, Hamilton County deferred issuing long-term bonds until the market stabilized, Mr. Wright said. The initial VW infrastructure and other county projects were paid for through commercial paper and bond anticipation notes, he said.

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