February 05, 2013 @ 11:53 am
The City of Puyallup achieved greater-than-expected savings by refinancing portions of three prior bond issues.
As part of the refinancing process, the city sold a total of $13.5 million of bonds on Jan. 29, to replace existing debt. The sale resulted in a net savings of $754,833 during the next 13 years. While the city set a 3 percent minimum savings goal, the actual savings achieved by the refinancing was roughly 5.5 percent due to the favorable bond market.
Mayor Rick Hansen stated, “It is our aim to prudently manage the resources our community has entrusted us with, and refinancing debt at lower interest rates has helped achieve that goal.”
City Finance Director Cliff Craig added, “Our timing in the market was very good. Because interest rates are still among the lowest in 45 years, the city was able to achieve a net savings that exceeded our goal.”
D.A. Davidson & Co. in Seattle served as bond underwriter.
The city’s “AA” rating on the utility revenue bonds and “AA-” rating on the general obligation bonds, both from Standard & Poor’s, also contributed to the success of the sale.
S&P cited the city utility’s strong financial metrics, minimal future financing needs, good management practices, and the city’s financial performance as credit factors supporting the strong ratings.
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