Piper Jaffray was the winning bidder in Harford County's $40 million bond sale Tuesday, offering a 3.0465 percent interest rate to beat out 11 other bidders.
"It is higher than the county paid last time, but that was a different market," county bond counsel Steve Winter told the Harford County Council, which approved the sale unanimously during a brief special meeting Tuesday afternoon.
Winter said 3.0465 "in this market is a very good rate."
The bid is about half a percentage point higher than the county received in the past.
"I expect it to be half a percent [higher] next year again," financial adviser Lester Guthorn told the council, adding rates could be expected to rise again.
Bonds can be bought in $5,000 blocks, but the county is not allowed to give private investors or brokerage houses a leg up over institutions, Guthorn said.
"We want to make sure the offering is fair to all and we cannot sort of reach in and say... you need to set aside so much for a retail customer," he said. "This needs to be as transparent as possible."
The bonds' premium for resale is also determined by the broker.
"What we try to do is everyone has the same bid parameters," Guthorn told the council. "It is simply how each bidder decides to structure their offerings."
Councilman Joe Woods said there may be "some comfort" in seeing large banks and firms come out as bidders and wondered if that is an indication of greater security.
Guthorn replied an institution's size or prominence does not necessarily make it a more secure bidder but said he did not consider quality to be a concern.
"The only thing we can evaluate is the lowest bidder. These are all qualified organizations," the adviser said.
Other bidders ranged from Hutchinson, Shockey, Erley & Co., to BMO Capital Markets, with interest rates proposed between 3.063755 and 3.168128 percent.
The bonds will mature on or after March 15, 2025, according to the resolution the council adopted at Tuesday's special meeting. The "good-faith" deposit from the winning bidder is $1 million, Hewitt said.
In February 2013, Harford sold $40 million in 20-year general obligation bonds at an interest rate of 2.515 percent and $74.66 million in 15-year refunding bonds at 1.956 percent. Those bonds were rated AAA by Fitch, Aaa by Moody's and AA+ by Standard & Poor's.