Missoula County took the sale of its fairgrounds improvement bonds to the market earlier this month and scored what Chief Financial Officer Andrew Czorny described this week as an “unbelievable” deal.
The bonds will raise roughly $14 million to complete Phase 1 work at the Missoula County Fairgrounds.
“We had a very successful sale the day after Veterans Day last week,” Czorny said. “We did our preliminary pricing on Tuesday and went to the market place on Thursday morning. It was unbelievable. We just hit it right.”
Czorny detailed the ins and outs of the bond market, saying that in the previous three weeks, nearly $30 billion in paper had flooded the market.
“We were concerned the buyers might be wary,” he said. “Everyone was trying to push their paper out before the election.”
The county had been playing the waiting game for months, hoping to hit the market at the right moment. Commissioners had approved the parameters of the limited obligation bond back in October.
“When we went out, there was only $2 billion to $4 billion worth of paper available, so buyers were hungry,” Czorny said. “There wasn’t any other Montana paper out there, so they were aggressively bidding on our deal, and we priced it very aggressively.”
Last July, the county issued a bond anticipation note valued at $6 million to begin funding the roughly $14 million in renovations associated with the first phase of work at the fairgrounds.
Last week’s bond sale will cover that initial $6 million and provide an additional $9 million to complete Phase 1 work, Czorny said.
“We used $6.3 million to repay the bond anticipation note we had with First Security Bank,” he said. “They covered some of the initial expenses before we were able to go to market. The remaining $9 million will go into the fairgrounds construction account to complete Phase 1 of the fairgrounds construction project.”
Phase 1 work has included preservation of the historic Commercial Building, and the construction of a new concessions building. Utility work, a new maintenance shop, a new learning center, and trails and landscaping are also included.
After the bond sale, Czorney said the county was left with roughly $990,000 in unsold bonds. Of those, $660,000 had a maturity date of 2050. Bank of America took those bonds into its inventory, Czorny said.
“Normally we sell 20-year bonds, but with the fairgrounds special district, we went ahead and sold 30-year bonds to extend the maturity,” he said. “It worked out very well. We’ll have the money next week.”