MCIA schedules sale of bonds for Pooled BANs Program

The Monmouth County ImprovementAuthority has scheduled the sale of bonds for the 2008 Fixed-Rate Pooled Loan Program for Nov. 14. The MCIA scheduled the sale at its meeting Oct. 10, after receiving approval to proceed from the state Local Finance Board.

Also known as the Pooled BANs Program because municipalities use it to retire short-term bond anticipation notes as well as to fund new ordinances, the annual financing is backed by a county guaranty.

The Monmouth County Board of Freeholders' decision to back the bonds enables the participating towns to take advantage of the county's excellent credit rating of AAA from Standard & Poor's, Aaa from Moody's Investor Services and AAA from Fitch Investor Services, according to a press release.

In addition to interest savings that result from the high credit rating, the 10 participating towns realize savings from economies of scale by pooling their needs into a single MCIA bond sale and splitting the issuance costs.

This year the county guaranty was especially important for the towns because of the state of the credit markets, according to the MCIA.

"In an unpredictable market where short-term note offerings are receiving high bids or no bids at all, the towns can be comforted that this bond sale with a county guaranty will supply a low interest rate option in today's highly volatile market," said Jennifer Edwards, the MCIA's financial adviser.

The MCIA will invite representatives of the participating towns to an Oct. 24 meeting to answer any questions they have about the market, said MCIA Chairman Al Rosenthal. The meeting will start at 8:30 a.m. in Room 235 of the Monmouth County Hall of Records in Freehold.

Ten municipalities are scheduled to participate in the 2008 Pooled Fixed- Rate Loan Program, which is not to exceed $47 million. The towns participating in this year's program are Allentown, Freehold Township, Highlands, Holmdel, Keansburg, Manalapan, Middletown, Oceanport and Shrewsbury.

Last year's program provided $53.3 million in financing to help 10 municipalities convert BANs and fund new ordinances. The 2007 Pooled BANs Program was the largest since the MCIA began offering it in 1993. Since then, 34 municipalities, three local utility authorities and one fire district have secured more than $418 million in fixed-rate financing for a combined savings of more than $8 million in debt service costs alone, according to the press release.

Over the past 22 years, 49 of Monmouth County's 53 municipalities have participated in at least one MCIA financing. The MCIA has provided more than $1 billion in financing for towns, school districts, local and regional utility authorities, county government entities and open space acquisition and preservation.