Interest rates rising, but bonds remain attractive
For example, the 10-year Treasury note rate has doubled since the beginning of 2021. Fortunately, for counties and other public entities, their tax-exempt borrowing rates have not risen as quickly as taxable rates.
To the contrary, tax-exempt rates have only risen by about 10 percent.
“To put this in perspective, the rates achieved last week are within .25 percent of the lowest we have ever seen for these terms,” Financial Services Director Grant Satterly said. “This creates a unique opportunity to finance long-term projects at rates that we may not see again for many years. However, many experts are in agreement that these rates will rise dramatically in the future.”
KACo sold a bond issue March 18 that reflects how attractive tax-exempt borrowing rates remain. Borrowers that participated in the March 18 bond issue saw the following rates:
- 2.064 percent (10 years)
- 2.18 percent (15 years)
- 2.465 percent (30 years)
If your county has projects or other needs that require long-term funding, the current rates remain at near historical lows. No one knows exactly how long these rates will stay this low, but we wanted to inform you of where they stand today.