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Bradley County funds in good shape, adviser tells commission

By: Randall Higgins
(Contact)

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Morgan Keegan

CLEVELAND, Tenn. — Bradley County’s bond rating has gone up a notch, a financial adviser told county commissioners this week.

Scott Gibson, with Morgan Keegan, said rating agency Standard & Poor’s raised the county’s rating from A to AA- because of continuing commercial, housing and industrial development and conservative budgeting.

Mr. Gibson said the county now can refinance its variable-rate debt for more security, and he said investments made with the money from the sale of the former Bradley Memorial Hospital are safe.

A resolution approving the new restructuring will be on Monday’s commission agenda.

Mr. Gibson said bond insurance companies have been hit hard by the subprime mortgage crisis and many have been downgraded. Refinancing debt reduces the county’s exposure to the downgraded insurance companies, he said.

County Mayor D. Gary Davis said the commission has refinanced its debt before. The value of county’s existing bonds wouldn’t be affected by the current market unless the county had to sell them now, he said.

Mr. Gibson said county investments remain secure, including the hospital proceeds.

“There has been a lot of talk, a lot of concern, on the street about those investments lately,” Mr. Davis said.

Mr. Gibson said $7.5 million of the county’s $15 million share of the hospital sale is invested in government securities at 5.05 percent interest. Another $8.5 million is invested in municipal securities averaging 4.36 percent interest.

Commissioner Ed Elkins, county finance committee chairman, asked if the county agreement to reinvest 15 percent of the interest in the fund to protect it from inflation is enough. Mr. Gibson said while that might change, today 15 percent is enough.

“That’s something we want to keep an eye on,” Mr. Elkins said.

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