In July, the County issued $88,625,000 worth of General Obligation Bonds to pay for new schools, school expansions, road projects and parks. By the time the bids were in and the sale was complete, investors paid $10,309,300 in premiums to get the bonds, bringing the total bond proceeds available for use to $98,934,300.
Steven A. Solomon, the County’s Director of Finance, said investors pay premiums on bonds in the same way home buyers would pay above the listed price after a bidding war.
Solomon said the County’s AAA Bond rating with each of the three top rating agencies makes Prince William County bonds desirable to investors.
“Every one of these people that are investing has to have AAA-rated debt as a portion of their portfolios to mitigate risk. It’s very difficult to get. There’s no commercial AAA market anymore, and so, basically, they’re just looking for these rare government credits. If you have to have it, you’re willing to pay a premium to get it,” he said.
In an Aug. 6, 2013 presentation to the Prince William Board of County Supervisors, Solomon said that the premiums allow the county to borrow less. “By issuing less debt, our principle and interest payments are going to be lower than if they were sold at par.”
Solomon’s presentation showed that bonds for school projects, worth a face value $59,990,000, brought in total proceeds of $67,775,731. The school projects include a new elementary school in Haymarket, a new K-8 school in Nokesville, and the design, engineering and architect services for the County’s 12th high school. It also includes additions to Parkside Middle School and River Oaks Elementary School. Dumfries Elementary School will receive an addition, as well as a renewal.
The road bonds, worth a face value of $28,635,000, brought in total proceeds of $31,158,569 to pay for road projects that include improvements to U.S. 1 between Neabsco Mills and Featherstone roads and Rollins Ford Road between Vint Hill Road and Song Sparrow Drive. In addition, this bond funded the construction of the Fuller Heights Park.