Warren County proceeds with caution on bond reissue

What a difference two weeks can make – especially in the US Financial Marketplace.

“Do NOT go to the light,” Davenport & Associates’ Ted Cole, left, and Sand Anderson at-torney Jesse Bausch may have been explaining of their Power Point (on far wall) on the quickly-changing financial dynamics at play in a potential bond reissue on a portion of the County’s 2011 bond reissue of $45.7-million. The bottom line is the savings “in the light” on the wall had lost almost a quarter of $667,000 in projected savings in 2 weeks, with nearly 3 more weeks of potential additional losses before interest rates on a VRS Bond issue will be set.

That was the message of Warren County bond consultants prior to a scheduled October 18^th vote by the Warren County Board of Supervisors to authorize a November refinancing of a 2011 Capital Improvement Bond of $45.7-million.  In fact, the 2011 Bond was a reissue of an original 2004 Bond that financed massive Capital Improvements in the county, including construction or renovation of Skyline High School, new Warren County High School, old WCHS into the new Warren County Middle School, Samuels Public Library and Bing Crosby Stadium.

But two weeks after being advised that historic-low interest rates made re-financing a portion of that 2011 Bond a highly-advisable move that would net savings of over $667,000 dollars, things had changed.

What the Warren Supervisors heard, primarily from long-time financial advisor to the County, Ted Cole of Davenport & Associates, was that since his report of October 4^th, those historic low interest rates had attracted others nationwide to seek the same saving, consequently beginning to push interest rates back up.  The result is already a $145,144 loss in projected net savings.

Fixed interest rates on the pending Virginia Resources Authority (VRA) bond issue won’t be set until November 2^nd – so, the prospect of additional losses are possible, Cole told the Warren Supervisors.

He advised the Board to approve a Resolution to participate ONLY if interest rates re-adjust downwards enough to realize a saving of 7-percent, up slightly from the projected savings of 6.75-percent he reported based on rates and trends on October 4^th.

The Board concurred, unanimously approving the Conditional Resolution of participation.