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Johnston City to sell $12.97 million in general obligation bonds; low bid from TD Securities
Summary
PFM and city staff recommended awarding $12.97 million in general obligation bonds to TD Securities at a 4.67% yield; staff said the rate is roughly 1.8 percentage points lower than budgeted and could save about $1.4 million in interest over the bonds' life.
Johnston City staff and municipal adviser PFM recommended and the council approved awarding a $12,970,000 general obligation bond issue (Series 2025A) to TD Securities after competitive bids were opened May 20.
PFM reported nine bids with a low bid from TD Securities at a 4.67% yield and a cover bid from R.W. Baird at 4.88%. Municipal-adviser staff said the spread between high and low bids was narrow and that current results were favorable compared with a turbulent municipal market earlier in the spring.
The adviser told the council the rate is about 1.8 percentage points lower than the figure used in the city's plan of finance, which will reduce projected interest costs by roughly $1.4 million over the life of the bonds. The city had sought bond proceeds to fund the FY26 capital-improvement program.
Council moved and approved a resolution directing the sale and awarding the bonds to TD Securities. Staff said they worked with the finance team and bond counsel and noted S&P Global reaffirmed the city's AA+ rating ahead of the sale.
What it means: The lower-than-budgeted interest rate will reduce long-term borrowing costs for the CIP projects the bonds fund. The sale was approved by roll-call vote at the meeting.
