By MICHAEL P. RELLAHAN, Staff Writer

WEST CHESTER — The stellar performance of Chester County in the rating of its government bonds paid off for the commissioners this week, as the county was able to float two bond issues that saved hundreds of thousands of dollars in interest payments.

In announcing two bond issues for a total of almost $97 million, the county will save $493,000 in interest rates over the coming 23 years, the county's financial advisers said Tuesday.

In addition, the county's decision to float $40.9 million in federal taxable Build American Bonds will eventually show a savings of $4 million over what the county would have paid in interest for its normal tax-free issues, said Edward Murray, a representative of the county's bond underwriters, Boenning & Scattergood.

"It is an extraordinary accomplishment," Murray told the commissioners at their work session Tuesday, at which he laid out the terms of the bond issues.

"You should take note that the county has saved over $4 million, and you should be proud of that fact," Murray said.

The savings are due, in part, to the recent news that two bond rating agencies, Standard & Poor's and Fitch, had given the county AAA rating for its bonds, to go along with the Aaa rating already in place by Moody's Investor Service.

"Having the triple-triple (rating) made a difference," Murray said. "We were told that without the three-A rating, we would not have gotten away with this," he said.

The two bonds will be used for capital improvement projects that are either new or already in place.

The county will use the $40.9 million it receives from the sale of Build American Bonds to fund not only open-space purchases, but also to help repair and replace emergency radio equipment.

The federal bonds are taxable, unlike normal municipal bonds, but under the terms of legislation under which they were authorized earlier this year, the county will receive a 35 percent subsidy on a semi-annual basis. In the end, that will mean that the county will pay $4 million less over the 36 years of the bond issue.

The county also floated $55.9 million in normal tax-exempt bonds to refinance a series of bonds issued previously. The new bond issue will extend the life of the term by nine years to reduce the estimated average millage increase of the county's Capital Improvement plan to 2.43 percent over the next six years.

The county is also awaiting favorable interest rates on $158 million of bonds issued in 2007 and 2009.

To contact staff writer Michael P. Rellahan, send e-mail to mrellahan@dailylocal.com.