Railroad bonds fast tracked
Advantageous market conditions had Colleton County fast tracking the issuing of bonds for the purchase of the former Hampton and Branchville rail line.
The morning of April 20 found Colleton County Administrator Kevin Griffin in Charleston, meeting with representatives of the county’s bond counsel Howell, Linkous and Nettles to price the $7.16 million in bonds that will be used to provide the money to purchase the rail line.
“We were supposed to go next week,” Griffin said. “Then the market conditions changed.”
To take advantage of the attractive interest rate, Griffin said, the bond council and county decided to speed up the process of taking the bonds to market.
On April 19, Colleton County Council Chairman Dr. Joseph Flowers signed documents and the following morning Griffin was in Charleston.
“I came back with an extremely good rate,” Griffin said. “I was very pleased with that.”
The Hampton and Branchville Railroad Company was originally chartered in December of 1891 to serve the local timber industry.
When the SCE&G constructed the former Canadys Station power plant, Hampton and Branchville began running coal cars from its CSX connection in Hampton to the coal-fired power plant.
When the power plant was shut down in 2013, the rail line stopped operating.
The rail line had been slated for abandonment and salvage by its current owners until the county, along with regional and state economic development groups, approached the owners about putting together a plan to preserve the railroad.
Under the purchase proposal, Colleton County sells the bonds to cover the purchase price and costs associated with the environmental impact work required for the purchase, and then turns over the funds generated by the sale to the Colleton County Interposal Corporation, the economic development non-profit established by the county to handle the county’s portion of the railroad purchase plan.
Colleton County Intermodal Corporation would then loan the money to Palmetto Railways, a division of the South Carolina Department of Commerce that operates numerous railroad lines within the state, to purchase the rail line.
After the purchase, Palmetto Railways would then make at least five years of annual payments to the county from funds generated by the operation of the rail line while assessing its economic viability.
While the bond offering will be backed by the credit level of the county, Colleton County will not face any financial liability should Palmetto Railways’ projected revenue not meet expectations.
The sale of the bonds will close on either May 11 or 12.
