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Bridgeport approves $4 million certificates of obligation for parks at 3.75% true interest cost
Summary
The council approved an ordinance authorizing a $4 million issuance of combination tax and revenue certificates of obligation (Series 2025); bids were awarded to Bancroft Capital at a 3.75% TIC, S&P affirmed an A+ rating, and proceeds will fund park projects with a $3.5 million TIRS-backed portion and $500,000 on the general tax rate.
The Bridgeport City Council on May 12 authorized the issuance of combination tax and revenue certificates of obligation, Series 2025, to finance park projects and related improvements, approving the ordinance in a unanimous 5-0 vote after presentation by the city’s financial adviser and finance director.
Blake Roberts of PFM Financial Advisors told council that bids were opened that morning and Bancroft Capital was the winning bidder at a true interest cost of 3.75 percent. Roberts said the sale received eight bids — a strong market response — and that S&P had affirmed the city’s A+ rating. The financing was structured so the city will issue $3,865,000 in par/principal (sold at a premium to generate $4,000,000 in project funding), with a 12–20 year repayment structure. Roberts said $3.5 million of the financing will be repaid from TIRS revenue tied to the park financing, while the remaining $500,000 will be repaid from the city’s general debt-service ad valorem tax levy for citywide park improvements.
Roberts also noted the bonds were sold with bond insurance (a premium of about $13,000) that effectively allowed pricing at a higher credit equivalent and that the issue carries a 10-year call provision. Closing is scheduled for June, when the city will receive the project proceeds. Finance Director Corey Ingram introduced the item and reviewed that the council had previously authorized a notice of intent to issue the certificates and delayed the sale pending receipt of the city audit.
Councilwoman Sylvia Ramirez made the motion to approve the ordinance authorizing issuance; Councilman Matt Van Hoos seconded. The motion passed 5-0. Council and staff said the structure and timing were chosen to take advantage of favorable market movement after recent national developments in the bond market; Roberts described the result as favorable given recent rate uncertainty.
The ordinance approved the issuance, the levy of an ad valorem tax to pay debt service as required, and a limited pledge of surplus net revenues from the city’s water and sewer system as additional security where applicable. The financing documents and official statement will be finalized, and the city will close on the bonds in June.
