Town officials announced positive results from a $26.92 million bond sale on Thursday, Jan. 15 and an accompanying $12 million sale of bond anticipation notes (BANs), all of which yielded competitive interest rates on the strength of solid reviews from Standard & Poor’s Corporation, one of the three major Wall Street Rating Agency firms.
The Town received a total of 7 bids on the bonds, with William Blair & Company LLC, submitting the winning bid. The low bid on the Bonds was 2.36 percent. The bonds will replace BANs and provide new financing for various school, sewer and capital improvement projects. The largest part of the issuance is to finance the Town’s Middle School project.
The new Notes, awarded to TD Securities, attracted five bidders and will have a net interest cost of 0.16 percent.
“The successful sale was a direct result of the town’s track record of strong credit ratings,” Matthew Spoerndle, senior managing director of Phoenix Advisors and Southington’s financial advisor, said in a press release from the town manager’s office. “Ratings have become increasingly important in this environment. S&P has recognized the work town officials have done in recent years to continue to improve Southington’s fiscal health and as a result, the Town issues debt at very low levels. The rate on today’s bond sale is one of the lowest the state has seen in the last couple of years.”
S&P reaffirmed Southington’s rating at AA+/Stable Outlook. Within its rating, S&P referenced the Towns “Strong management conditions… with good financial practices”, “Strong budgetary performance”, “Strong budget flexibility…with reserves above 15% of expenditures”, and “Very strong economy among the factors influencing the Town’s high credit rating. The “AA+” rating is only one notch away from the highest bond rating (AAA) awarded by S&P.
The settlement date for the sale is January 27, 2015.