Smith County Gets High Bond Rating and Savings

TYLER — Smith County’s financial stability has been recognized when financial institutes Standard & Poor’s and Moody’s gave the county bond ratings of Aa2 and AA+, which are both just a notch below the highest score possible, AAA.

According to an update from Specialized Public Finance, Inc. to the Commissioners Court, the exceptionally high bond rating, along with falling interest rates will make paying off the recently passed jail bond much faster and less expensive than originally anticipated.

A total of $40.875 million in bonds were issued on Tuesday; $35 million from the recently passes jail bond at an interest rate of 2.564% and the refunding of about $5 million in existing county debt at 1.7489% interest. “It’s good to know that we will be able to pay this off even sooner and save money for the citizens of Smith County because of these lower rates and our high bond rating,” County Judge Joel Baker said.

The jail bond component will be structured with a 12 year amortization schedule, which is three years shorter than originally anticipated and the refunding component will save the county approximately $376,000 in total interest expenses. “A county jail with an interest rate of 2.5 is about as low as I have ever seen in this business,” said Financial Analyst Steven Adams.

In addition, S&P revised its Financial Management Assessment to “strong” from “Good” due to the adoption of a formal, long-range capital plan and a formal debt management policy, which is the highest classification.