City of Alexandria Receives Favorable Rate on Sale of General Obligation Bonds for Public Facilities, Infrastructure
For Immediate Release: August 13, 2018
After both major bond rating agencies reaffirmed the City of Alexandria’s top bond ratings, the City earned favorably low interest rates on the competitive sale of new general obligation bonds.
On July 25, the City issued $40.9 million in tax-exempt bonds, which will be used for schools, parks, public buildings, Metro, and other transportation improvements and infrastructure. The bonds, which will be repaid over 20 years, sold at a true interest cost of 2.89% to Robert W. Baird & Co., an international financial services firm. “True interest cost” represents the total cost of the debt, and includes interest payments, fees, and other components. The City received 12 bids from various banks and financial groups. The 2.89% true interest cost is higher than last year’s winning bond bid and reflects rising market interest rates.
“We are proud of the strong credit ratings that made these low interest rates possible,” said City Manager Mark Jinks. “Our receipt of 12 very competitive bids reflects our sound financial management and the good work of City staff.”
The low interest rates are the result of the City’s “AAA” and “Aaa” credit ratings from S&P Global Rating Services and Moody’s Investors Service, respectively, which were reaffirmed in July. The City has maintained these top grades from both major bond rating agencies since 1992. The higher the rating, the lower the interest rate required by bond investors. The City’s highest bond ratings and low interest rates result in very low borrowing costs for Alexandria’s taxpayers to fund capital projects and will save taxpayers millions of dollars over the life of these bonds.
For media inquiries, contact Melissa Riddy, Senior Communications Officer, at email@example.com or 703.746.3961.
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This news release is available at alexandriava.gov/105434.