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Annual bond review: Paynesville reports $8.3 million outstanding and maintains AA- rating
Summary
Finance staff said the city has about $8.3 million in outstanding bonds, maintains an AA-minus rating, and will not prepay bonds this year because current interest rates on existing debt remain low.
City staff delivered the annual bond review, saying Paynesville has roughly $8.3 million in bonds outstanding and that the city's credit rating remains AA-minus.
Derek (staff) summarized the city’s debt profile and comparable ratings in surrounding jurisdictions, noting that the newest bond financed the liquor store and that the 2013 water note is approaching its final years. "We have eight bonds outstanding — roughly 8.3 million — and our credit rating is still double A minus," Derek told the council.
Councilors asked whether any bonds should be prepaid this year. Staff advised that prevailing interest rates on the city’s bonds are low and that prepaying bonds is not currently advantageous; the council agreed to continue with scheduled payments.
Why it matters: the city’s debt profile and credit rating affect borrowing costs, capital planning and future infrastructure projects. Maintaining a strong rating helps keep interest costs lower for residents.
Next steps: staff will continue to monitor rates and the amortization schedule and will present future refinancing or payoff options if conditions change.
