Mayor Harry Rilling announced today that the City of Norwalk successfully refinanced $16,000,000 of outstanding City debt, in order to take advantage of lower interest rates in the market, and to achieve savings in interest costs for Norwalk taxpayers.
The transaction, which was underwritten by Raymond James was priced on September 10, 2015. The bonds that are being refunded were originally issued in 2011. The City regularly monitors the municipal bond market to determine if market conditions present an opportunity to reduce interest expense.
The total nominal savings over the life of the issue is $719,544. On a present value basis, the savings is $597,018. In FY 2015-16, the City will realize savings of $32,232, and thereafter the City will realize annual savings that average approximately $43,000 per year for the next sixteen years.
In a related matter, the City also received notification from Moody’s Investors Service and Standard and Poor’s (S & P) that the City’s Aaa/AAA bond ratings have been affirmed. The City’s bond ratings are the highest ratings available, and represent independent evaluations of the City’s creditworthiness. S & P indicated the rating assigned to Norwalk reflects their opinion of Norwalk’s creditworthiness based on the following factors:
Ø Very strong economy
Ø Very strong management
Ø Strong budgetary performance
Ø Very strong budgetary flexibility
Ø Very strong liquidity
Ø Very strong debt and contingent liability profile
Ø Very strong institutional framework score
S & P went on to indicate that, “we believe the capable management team will maintain the city’s strong financial performance and preserve at least strong reserves.”
Mayor Rilling applauded the initiative to save Norwalk taxpayer’s money, and was pleased with the results of the refunding transaction. The Mayor went on to say, “My administration looks for opportunities to save Norwalk taxpayers money whenever and wherever possible. I am pleased that we will be able to pass on more than $700,000 of savings to Norwalk taxpayers over the coming years as a result of this re-financing transaction.”