Norwalk secures $53 million bond sale at 3.69% but officials warn fund balance pressures could threaten rating

Summary

City officials said a Sept. 3 sale of $53 million in general obligation bonds drew 15 bids and produced a 3.69% interest rate and reaffirmed AAA ratings from S&P and Moody's, but finance staff warned projected FY25 draws on the fund balance could put pressure on that rating and raise future borrowing costs.

Norwalk officials said the city completed a $53 million general-obligation bond sale on Sept. 3 that drew an unusually large field of bidders and resulted in a 3.69% interest rate, while S&P and Moody's reaffirmed the city's AAA credit rating.

The outcome matters because lower borrowing costs reduce the long-term interest burden on taxpayers; but finance staff told the Common Council that the city's fund balance has been drawn down in recent months and that further draws could put the AAA rating at risk and raise future borrowing costs.

Mister Schmidt, a finance department staff member, said the sale attracted 15 bids — "the greatest number that I've ever been a part of" — which contributed to the low rate. He told the council, "The total sale was $53,000,000 in GO bonds," and said the low rate reflected strong investor demand as well as the city's fiscal management. Bill Lindsey, the city's financial adviser from UniStat, coordinated…

Norwalk secures $53 million bond sale at 3.69% but officials warn fund balance pressures could threaten rating

Summary

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