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Posted on: May 16, 2019

Orange County sells Limited Obligation Bonds to finance its FY 2018-19 Capital Investment Program

Image of historic Orange County Courthouse

Orange County sold its Series 2019A Limited Obligation Bonds (LOBs) on May 15 and achieved a true interest cost (TIC) of 2.46% from the underwriting firms of FTN Financial and Robert W. Baird & Co. The TIC was well within the County’s capital financing cost estimates. The LOB par amount of $14.5 million and premium proceeds of $2 million will fund the County’s annual CIP requirements for County and School facilities and County vehicles and equipment. The LOB maturity terms matched the useful life of the assets being financed.

The Series 2019A LOBS will be repaid over a 20-year term from county tax revenues and user fees for the Enterprise Fund specific capital items. LOBs are rated one notch below General Obligation bonds for state and local governments due to the installment repayment appropriation clause in the LOB security pledge as compared to General Obligation bonds, which are secured by the full faith, credit and taxing authority of the County.

“The Board of County Commissioners and County Manager Bonnie Hammersley's collaborative efforts culminated in a successful bond financing to support essential County and School capital requirements” said CFO Gary Donaldson.

AAA Bond Rating Maintained

All three of the major bond rating agencies affirmed the County’s ‘AAA’ bond rating and the LOB ratings of Aa1/AA+/AA+. The County’s strong credit rating allows the County to achieve the lowest possible borrowing cost for a sovereign, state or local government.

Orange County is among a few governments in the nation that have achieved a ‘AAA’ rating by all three of the major rating agencies.

The three rating agencies rationale and affirmation cited:

  • Very strong economy, with access to a broad and diverse metropolitan statistical area (MSA)
  • Solid financial position and comprehensive fiscal planning and proactive management
  • Manageable long-term debt burden


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