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Franklin County Sales Tax Revenue Bonds Earn Unprecedented Dual Triple-A Ratings

Thursday, May 10, 2018
Contact: Tyler Lowry, Franklin County Commissioners, 614/525-6630
Marty Homan, Franklin County Commissioners, 614/525-5273

Two hundred fifty million dollars in tax-exempt sales tax revenue bonds that Franklin County is set to issue this summer have been rated Triple-A by the two principal ratings agencies, Moody’s Investors Service, Inc. and S&P Global Ratings.  This is the nation’s first and only local government issuance of special tax bonds to ever receive Triple-A ratings from both Moody’s and S&P.  At the same time, the rating agencies both also reaffirmed their Triple-A ratings of the county’s outstanding general obligation bonds.

Proceeds from the sale of these bonds, which are to be backed by the county’s sales tax revenue over the coming 30 years, will be used to construct a new county corrections facility and make physical improvements or repairs to other county buildings.  Like an individual’s credit score, a government’s bond rating determines what interest rate it must pay in return for borrowing money.  A higher rating means lower interest rates, which saves the county money.  Triple-A is the highest rating available.   

“The Triple-A bond rating reflects the highest standards the independent rating agencies can provide,” said Board of Commissioners President, Kevin L. Boyce.  “It’s not only a reflection of the county’s credit rating, but of the smart, careful, responsible planning that we put into the county’s finances every day.”

Franklin County has maintained  Triple-A bond ratings on its general obligation bonds since 1993, and is one of only 2% of counties nationwide to have such ratings from both Moody’s and S&P.

“Franklin County’s residents can take pride that the county’s bonds continue to be so highly rated,” said Franklin County Commissioner Marilyn Brown.  “It’s a tangible way in which the taxpayers can see that strong management and responsible budgeting are saving money and preparing the county for future growth.”

In its rating release, Moody’s highlighted the bonds’ structure and the county’s strong financial history, large and growing tax base, and the presence of The Ohio State University and the state government.  S&P Global Ratings specifically noted the bonds’ strong legal provision and the county’s stable sales and use tax stream, as well as the deep and diverse regional economy.

“We always have an eye to the county’s finances and future financial position,” said Commissioner John O’Grady.  “These high ratings are a continued validation to residents and the business community that Franklin County is a good investment, and a great place to live.”

The bonds are scheduled to be sold on May 23rd, and will have a final maturity date of June 1, 2048.  Bank of America Merrill Lynch will be the lead underwriter on the transaction, and Morgan Stanley will serve as co-senior manager.  Other members of the underwriting syndicate include KeyBanc Capital Markets, Loop Capital Markets, PNC Capital Markets, and Stifel, Nicolaus & Company, Inc.  The financing team includes H.J. Umbagh & Associates Certified Public Accountants LLP as municipal advisor, Frost Brown Todd LLC as bond counsel, Barnes & Thornburg LLP as underwriters’ counsel, and the Huntington National Bank as trustee, register, and paying agent.

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