The Tulare County Transportation Authority sold $70.4 million in bonds to finance road improvements and refund a previous issuance.
The bonds mature between 2026 and 2037, yielding between 3.16% and 3.64%. They pay interest at 5%. The securities received a rating of AA from S&P Global Ratings.
The issuance comes amid persistently high inflation and interest rates, potentially reducing revenue from sales taxes that forms a pool of funding for transportation projects. “Ongoing high inflation may affect consumer spending decisions and adversely impact sales transactions in the County,” resulting in lower sales tax revenues, according to the official statement accompanying the sale of the bonds.
Most of the bond proceeds, about $56 million, will defease bonds issued in 2014. An additional $30 million will finance a series of projects aimed at bolstering the county’s roads. These include the addition of several roundabouts, road widening, bridge repairs, and other infrastructure improvements.
The projects could be a boon to Tulare County’s economy. Transportation is the second-fastest growing sector in the county, according to an economic forecast published last year by the state of California.
Tulare County is an inland California county that encompasses much of the area between Bakersfield and Fresno. It has a population of almost 500,000. The bonds are limited obligations of the authority, payable by a half-cent sales tax introduced in 2006.
Mesirow Financial, Inc served as underwriter on the issuance, purchasing the bonds for $78.3 million. The price reflected a premium of almost $8 million.