The San Joaquin County Transportation Authority sold $31 million in bonds to refund previously issued securities.
The bonds mature between 2025 and 2032, yielding between 2.2% and 2.8%. They pay interest at 5%. The securities received a rating of AA+ from both S&P Global Ratings and Fitch Ratings, which upgraded the authority’s rating from AA and assigned a positive outlook.
The rating “reflects a sustained growth in revenues based on continued population gains and an ever-growing logistics sector that helps both sales taxes and employment growth,” Fitch analysts wrote. The positive outlook is based on expectations that “improved revenue growth prospects will strengthen the resilience of solid debt service coverage during typical economic downturns assuming no further leverage,” the analysts added.
The issuance proceeds will refund bonds the authority sold in 2014.
San Joaquin County is in central California, anchored by the city of Stockton. The county’s economy is largely defined by the travails of the e-commerce industry. Fulfillment centers play an outsized role in county revenue, with sales tax collections bolstered by online orders completed at such centers.
The bonds are limited obligations of the authority, secured by sales tax revenues.
Wells Fargo Bank, NA, served as underwriter on the issuance, purchasing the bonds for $34.8 million. The price reflected a premium of $3.8 million. PFM Financial Advisors LLC acted as municipal advisor.