2011 Bond Rating
At last night's council meeting, we approved the sale of bonds for various 2011 construction projects. Last year our bond rating was upgraded, and I was pleased to see that we maintained that high rating this year. (Last year Standard & Poor's rated us "AA+," and this year it's Moody's rating us with their equivalent rank, "Aa1".) Only one rung of the credit quality ladder is higher.
The bond sale had a combined true interest rate of 3.1805%. In comparison, last year we issued "Build America Bonds" (something made possible by the stimulus bill), which after rebate were comparable to an interest rate of 3.0222%. In 2009, our bonds were at approximately 3.4%.
It's worth noting that the 2011 bonding has a longer duration of 20 years versus our usual 15 years. This is related to the 20-year assessment schedule for the Shores project in Gladstone. As is usually the case, a lot of our bonding is tied to specific obligations of individual property owners through special assessments; as those assessments are paid over time, those payments rather than taxes from the city at large will be used to repay the bonds.
The bond sale had a combined true interest rate of 3.1805%. In comparison, last year we issued "Build America Bonds" (something made possible by the stimulus bill), which after rebate were comparable to an interest rate of 3.0222%. In 2009, our bonds were at approximately 3.4%.
It's worth noting that the 2011 bonding has a longer duration of 20 years versus our usual 15 years. This is related to the 20-year assessment schedule for the Shores project in Gladstone. As is usually the case, a lot of our bonding is tied to specific obligations of individual property owners through special assessments; as those assessments are paid over time, those payments rather than taxes from the city at large will be used to repay the bonds.
Labels: development, finance
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