McLennan County will pay an interest rate of just 1.47% on its $14.5 million bond issue that will put heat-loving penguins and a learning center in Cameron Park Zoo, a rate the county’s investment adviser described as incredible.
“It’s the lowest we’ve seen in 2020 on 20-year issues,” said Andrew Friedman, managing director of Texas-based SAMCO Capital Markets Inc., whose clients include cities, counties and school districts statewide.
SAMCO supervised a competitive bidding process that attracted offers from nine investment bankers, Friedman said by phone. The lowest, and winning, bid was submitted by Robert W. Baird & Co., a Milwaukee-based independently owned investment and financial services company.
The county will pay $856,000 annually, or $17.1 million, to retire the bonds. That is about $2 million less than the county would have paid with the interest rate it initially was expecting to get on the bond.
Friedman said SAMCO started the bid solicitation process believing, conservatively, that the county could secure an interest rate as low as 2.75%.
McLennan County government has earned a sterling reputation among investors, financiers and rating agencies, Friedman said.
“It has incredible strength of credit, and the name ‘McLennan County’ catches the attention of people. Due to Magnolia, it has name recognition it did not have before. It has become known as the home of Magnolia,” Friedman said, referring to the array of Magnolia-named attractions locally, including Magnolia Market at the Silos, Waco’s most popular tourist attraction.
Investors generally are willing to accept a lower interest rate, a lower rate of return, if the seller’s financial integrity reduces the risk involved.
Moody’s Investors Service most recently assigned an Aa1 rating to McLennan County, the second-highest rating attainable, Friedman said.
“That’s the same as the federal government,” he said.
County Administrator Dustin Chapman confirmed Wednesday the county is scheduled to receive proceeds from bond sales Sept. 1.
McLennan County voters approved the $14.5 million zoo expansion that will include a $4.4 million South African black-footed penguin exhibit, an $8 million education and veterinary complex, a $100,000 commissary and a $375,000 overhaul of the hoofstock barn, zoo backers announced.
The city of Waco oversees day-to-day zoo operations.
Terri Cox, executive director of the Cameron Park Zoological and Botanical Society, told the Tribune-Herald last year the zoo would award contracts in four phases, giving more companies a chance to participate.
McLennan County adopted a similar approach to building the new $30 million-plus sports and events complex rising at the Extraco Events Center at Lake Air Drive and Bosque Boulevard, in the Heart O’ Texas Fair complex.
The zoo project originally was scheduled to be complete in late 2021 or early 2022, but Cox said Wednesday COVID-19-related delays probably would delay the opening by three months to six months.
“The hoofstock barn remains first on the schedule,” Cameron Park Zoo spokesperson Duane McGregor said, relaying a message from Cox.
Since voters approved the bond issue, Chris Vanskike has been hired as director of the Cameron Park Zoo. He spent 21 years at the San Antonio Zoo, where he served as vice president of operations, facilities and capital construction. He oversaw $75 million in capital improvements and managed zoo operations, human resources and information technology.
In San Antonio, the Missouri native oversaw renovations of the zoo’s elephant and rhino exhibits, the addition of a giraffe feeding station and zebra barn, the expansion of the tiger exhibit, construction of an $11.75 million parking garage and construction of a restaurant complex to commemorate the zoo’s 100th anniversary, according to Tribune-Herald reporting last year.
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