City secures $11 million in bonds at record low rates

During a recent government meeting, city officials discussed the authorization of up to $11 million in combination tax and revenue certificates of obligation, as well as general obligation bonds. The meeting featured Andrew Friedman, a bond consultant from Samco Capital Markets, who provided insights into the competitive bidding process for these financial instruments.

Friedman reported that the city received six bids for the certificates of obligation, with the lowest interest rate at 3.85% from TD Securities. This reflects strong market interest, as the spread between the best and worst bids was nearly 15 basis points. He noted that the current trend of declining interest rates, influenced by expectations of a Federal Reserve rate cut, has benefited the city’s financing efforts. In comparison, last year’s similar financing had an interest rate of 4.06%.

The general obligation bonds, which were also discussed, attracted five bids, with the best rate at 3.86%. Both the certificates of obligation and the general obligation bonds are intended to fund a public safety facility and will provide $11 million and $3 million, respectively, to the city’s budget upon closing.

Friedman highlighted the city’s positive credit outlook from Standard and Poor's, which upgraded the city’s outlook from stable to positive, indicating a likelihood of a credit rating upgrade within the next two years. This change is attributed to the city’s growing economy, improved financial controls, and consistent budget adherence.

Overall, the meeting underscored the city’s strong financial position and the successful management of its debt offerings, positioning it well for future economic development.