Bond refinance expected to save half-million dollars
A recent series of bond and note sales, with interest rates under 2% for 20-year bonds, will provide financing for various school projects and renovations to the Police Department, according to First Selectman Vicki Tesoro.
The bond sales included refinancing of a series of bonds issued in 2009 and 2011 at a 0.9% interest rate that will save taxpayers $472,000 over the next five years.
“These results were even better than we could have imagined,” Tesoro said. “We are very pleased with this outcome because it keeps the burden on the taxpayers, related to interest costs, as low as possible.”
Matthew Spoerndle, senior managing director of Phoenix Advisors and Trumbull’s municipal advisor, said this was the first 20-year bond below 2 percent in years.
“It couldn’t have come together better,” he said. “Trumbull’s financial health remains strong and continues to improve.”
The sales and refinancing results, completed last month, were driven by the town’s AA+ credit rating, Spoerndle said.
In the sale of the new 20-year bonds, the town raised $9.6 million. In the refinancing, the town sold $7.9 million to refinance bonds originally issued a decade ago at higher rates. Finally, the town also sold $8.7 million in short term, one-year notes at an interest rate of 1.13 percent. Proceeds will provide initial financing for a number of school, sewer and general purpose projects, Tesoro said.
Trumbull’s rating is the second highest rating available, one notch below the most coveted AAA . The rating is based on Trumbull’s economy, management and fiscal practices.
“I couldn’t be happier with this outcome, and I thank our bond counsel Joseph Fasi and our partners at Phoenix Advisors for their exceptional work,” Tesoro said. “This process illustrates what sound financial management of our town can produce. We’ve gotten our fiscal house in order. We’re paying far less to fund more critical community improvements, and the burden on our taxpayers is lower as well.”