State Qualified Bonds Net 3.073%
Thursday, February 23, 2017
Mayor Domenic J. Sarno and Chief Administrative and Financial Officer, Timothy J. Plante announce the results of a recent bond sale. On Tuesday, February 14, 2017, the City received competitive bids from bond underwriters for a $44,305,000 20-year general obligation bond issue. Bank of America Merrill Lynch was the winning bidder on the Bonds with an average interest rate of 3.073%. The City received a total of 8 bids for the Bonds. Bond proceeds will be used to finance various capital projects.
Prior to the sale, S&P Global Ratings, a municipal bond credit rating agency, affirmed the City’s rating of ‘AA-’. The rating agency cited the City’s very strong management with strong financial policies and practices, strong budgetary flexibility, very strong liquidity and strong institutional framework as positive credit factors. Standard & Poor’s also affirmed the ‘AA’ enhanced rating on the Bonds as debt service is secured by the State Qualified Bond Act local state aid intercept program.
In addition, Moody’s Investors Service, another municipal bond credit rating agency, affirmed the City’s rating of ‘A2.’The rating agency cited the City’s regional economic center of Western Massachusetts with some institutional presence, sizable tax base, and conservative fiscal management and adherence to formal financial policies as credit strengths. Moody’s also affirmed the ‘Aa2’ enhanced rating on the Bonds as debt service is secured by the State Qualified Bond Act local state aid intercept program.
The bids for the Bonds were accepted at the offices of the City’s Financial Advisor, FirstSouthwest, a Division of Hilltop Securities Inc., at 54 Canal Street in Boston, Massachusetts.
Mayor Domenic Sarno stated, “I am excited with the results of the bond sale and the affirmations of the City’s credit rating from both Standard and Poors’ and Moody’s. We continue to maintain the highest bond ratings in the City’s history. I would like to thank CAFO TJ Plante and my financial team for all their hard work and dedication to the City of Springfield. Though this might not sound ‘sexy’ to many, it allows me to do those ‘sexy’ projects and highlights my administration’s financial discipline, stability and strength.”
CAFO Timothy Plante stated, “I am thrilled with the results of the bond sale. The City has been strategic in issuing debt to fund capital projects and was able to lock into amazing rates of 3.073% for 20 years.” Plante further stated that “It is also great news that both Standard and Poors’ and Moody’s affirmed their credit ratings for Springfield at AA- and A2 respectively. Both agencies pointed to strong financial management and strict adherence to financial policies. This is a testament to the strength of the City’s financial team. I appreciate the efforts of Comptroller, Patrick Burns; Treasurer, Stephen Lonergan; Budget Director, Lindsay Hackett; and Senior Analyst Jennifer Whisher. ”
Below is a list of capital projects being financed by the bond proceeds.