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Dubuque sells three bond issues; Moody’s affirms AA2 and Baird, Northland win bids
Summary
Council approved proceedings to issue three series totaling up to roughly $24.25 million; Moody’s affirmed the AA2 issuer rating and bids were awarded to Robert W. Baird and Northland Securities with lower-than-estimated true interest costs.
DUBUQUE, Iowa — The City Council on Monday approved proceedings for the directed sale of three general obligation bond series and awarded the issues to the best bidders after a competitive sale held earlier in the day.
Chief Financial Officer Jennifer Larson recommended council approval of proceedings for: up to $6,500,000 tax-exempt general obligation bonds (series 2025A), $8,500,000 taxable general obligation bonds (series 2025B) and $9,250,000 taxable general obligation urban renewal bonds (series 2025C). The council adopted the resolutions by roll call (motion passed 7-0).
Larson and the city’s bond adviser, Tianna Pooler of Independent Public Advisors, reported results of the competitive sale. Pooler said the city received seven bids on the 2025A issue; the winning bidder for the 2025A series was Robert W. Baird with a true interest cost (TIC) of about 3.79%, roughly 12 basis points below the estimate. The two taxable series attracted five bids; Pooler recommended awarding the 2025B and 2025C taxable series to Northland. She told the council taxable TICs were about 5.10–5.15% versus an estimated 5.72%.
Pooler noted the city’s issuer rating and outstanding general obligation unlimited tax bonds were affirmed at AA2 by Moody’s Investors Service. "That's a very strong rating," she said, and cited the city’s regional economic role, solid resident income and steady valuation growth as credit strengths. Pooler said taxable rates had fallen and the sale produced about $400,000 in additional proceeds on the A series because of execution timing and market conditions.
Larson and Pooler outlined project uses for the series: the 2025A proceeds will largely fund items in the Lost in Greater Downtown TIF area including fire improvements, airport work, Central Avenue streetscape and refuse vehicles; the 2025B issue covers additional projects including downtown smart parking; the 2025C issue is targeted to the Schmidt Island project and will be paid by the Dubuque Regional Authority (DRA).
Councilors asked clarifying questions about the meaning of "full value per capita" in Moody’s analysis and the difference between federally tax-exempt and taxable issues. Pooler explained the tax distinction affects investor taxation of interest income and therefore pricing; she said state tax exemption for the urban renewal bonds depends on the investor and may not materially change pricing in the competitive market.
The council voted 7-0 to adopt the recommended proceedings and award to the recommended bidders. The resolutions direct staff to close and deliver the bonds under the terms reported.
