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Torrington reports strong results from bond and note sales; adviser calls pricing remarkable
Summary
City officials reported that municipal note and bond sales drew competitive bids and better-than-expected interest rates. Financial adviser said Torrington's pricing looked like higher-rated issuers and noted strong presale demand.
City finance staff told the council that Torrington's recent note and bond sales were competitively bid and produced lower-than-expected interest costs.
Finance staff reported the city sold $22,350,000 in general obligation bond anticipation notes to Janney Montgomery Scott at a net interest cost of 2.8148% and received a premium of $264,154.65. The city also sold $15,900,000 in general obligation bonds to Cabrera Capital Markets Inc.; the bonds produced a true interest cost of 3.2672% and a premium of $1,313,268.49.
Financial adviser Bill Lindsey provided a written comparison saying Torrington's reoffering yields and spreads were strong and, in his view, priced like higher-rated securities ("double A or even double A-plus"). He noted the purchaser presold roughly $8,420,000 — about 53% of the issue — which he said likely reduced yield and spread; the number of bidders (six for the notes; 15 for the bonds) and trade data supported strong demand.
Why it matters: Lower borrowing costs reduce the city's interest burden on projects financed through the municipal markets. City staff said the results were better than anticipated and noted the sales were among the lowest rates reported so far this year for Connecticut municipalities.
Ending: Staff and advisers said the strong market reception reflects consistent preparation and credited municipal advisory work and bidder interest; no council action was required other than the informational report.
