BATES COUNTY, MISSOURI APPROVES
LEASE REFUNDING CERTIFICATES OF PARTICIPATION WITH A NET SAVINGS OF ABOUT $250,872
At a regular meeting on Wednesday, February 23, 2022, the County Commission of Bates County, Missouri approved a resolution authorizing the issuance and sale of $4,825,000 Lease Refunding Certificates of Participation to its Municipal Bond Underwriter, L.J. Hart & Company of St. Louis, Missouri. The Series 2022 Refunding Certificates have reoffering yields ranging from 1.15% to 2.10% to constitute a new effective interest rate of 1.92%, compared to an average interest rate of 3.47% for the Series 2018 Certificates being refunded. Through this refinancing, the County reduces future interest expense by $250,872.
Presiding Commissioner, Jim Wheatley, briefly described the plan which involved accelerating principal payments to absorb interest savings from 2023 through 2030 with the bulk of the savings occurring in 2031 and 2032. It was one of three options that L.J. Hart & Company shared with the County officials and became the favorite idea because it shortens the final payment on the financing by one full year while still preserving a short call feature of April 15, 2027 to allow for future prepayments at no penalty to the County. It is also produces good interest savings without having to deplete the County’s reserves. “We generally came to a consensus that this plan represented our most economical action and are very pleased that the municipal bond market brought us favorable interest rates to save Bates County taxpayers the $250,872, “Mr. Wheatley remarked.
Larry J. Hart, CEO, and Erin McManus, Senior Analyst of L.J. Hart & Company, stated that County received an A+ rating from S&P Global (formerly known as Standard & Poor’s Corporation) on this financing. The sound financial condition of Bates County was one of the key factors leading to the good marketing results. They also mentioned that the help from the County elected officials Marlene Wainscott as County Clerk, Jim Platt as County Treasurer, and each of the County Commissioners, contributed to the success of the rating conference call. “All of the offices of Bates County as well as the residents should be pleased that the A+ rating was awarded for this financing,” Ms. McManus remarked.
L.J. Hart & Company was directed to make the refunding certificates available to local financial institutions and individual investors. The Community First Bank of Butler purchased $500,000 of the Certificates which contributed to the overall success of the financing. According to L.J. Hart & Company, the lease certificates mature from April 15, 2023 through April 15, 2031 and interest paid by the County is exempt from federal and state of Missouri income taxes. The settlement (closing) date is March 9, 2022, and the refunding lease proceeds are to be kept at the current trustee bank to be applied on April 15, 2022 to prepay all of the remaining $4,850,000 of the Series 2018 Certificates. The Commission expressed their gratitude to Mr. Hart and Ms. McManus for their management of the refunding and their quick response to achieve this $250,872 of future interest savings.
