Chesterfield County is going forward with a sale of $50 million in bonds – and for the first time, it’s giving the public first crack at buying in.
The county starts the sale July 11, with bonds offered initially to residents and business owners in Chesterfield and throughout the rest of Virginia. Funds from purchases will be put toward school projects that were included in a $304 million bond referendum that county voters approved in 2013.
Those projects include construction of a new school – the planned Old Hundred Elementary School in the Midlothian District – as well as replacements of Matoaca, Harrowgate, Reams, Crestwood and Ettrick elementary schools. Sales also will fund “major” maintenance projects at other schools throughout the division.
Deputy County Administrator Matt Harris said the sale is a logical extension of the public involvement shown in the 2013 referendum.
“There was a big community push to go in and work on these older neighborhoods and communities,” Harris said. “We’ve heard since the referendum was approved that folks really feel connected to those facilities and believe in the projects and just want to participate.
“We’re responding to the requests that we’ve gotten from our citizenry to participate in these transactions. It’s a solid investment with a reasonable return and has that personal connection to it.”
The county is selling the bonds in $5,000 increments through three underwriting firms: Bank of America Merrill Lynch, Raymond James and Wells Fargo Securities. Harris said those firms were selected over other proposals solicited based on their retail presence across Chesterfield and the state.
Harris said the rate of return on the bonds would not be set in advance. He said buyers who place orders will receive pricing Wednesday and be able to lock rates in on Thursday. Harris said he expects rates will be in the 2-3 percent range, though he stressed that rates could change with the market.
Harris said the county is anticipating a strong local response to the sale, which will be opened to all potential investors July 12 if the local sale falls short of the $50 million goal. Results of the local sale will be reported to county supervisors at their July 25 board meeting.
The sale follows a recent reaffirmation of the county’s AAA credit rating by each of the three primary credit ratings agencies in the country: Standard & Poor’s, Moody’s and Fitch Ratings.
Chesterfield has maintained the AAA rating since 1997. The rating ensures low interest rates for the county when borrowing funds for capital projects.
Also, the county’s accounting department recently was recognized for excellence in financial reporting, receiving a certificate of achievement from the Government Finance Officers Association of the United States and Canada for its annual financial report for fiscal year 2017. The department has received the recognition for 37 consecutive years.
Details about the sale, including phone numbers for each of the underwriting firms, are posted on the county’s website. Investors who call will be quoted a price when they place their orders, with final pricing set on July 13.