Cedar Rapids bond sales results viewed favorably
CEDAR RAPIDS — The City of Cedar Rapids received favorable interest rates on the sale of more than $60 million worth of general obligation and revenue bonds authorized Tuesday.
The city council authorized the sale of some $62.6 million in bonds, which include some refunding bonds that will replace existing debt with debt carrying lower interest rates. and save the city several million dollars in interest payments over their life. Interest rates varied on the municipal bonds, with many in the 2.5 percent to 3 percent range.
“The city’s credit worthiness is really pulling in a lot of underwriters on this,” said Jon Burmeister of Public Financial Management Group, which worked with the city to offer the bonds. He said Moody’s Investor Service, which rates the city’s bonds, reaffirmed the city’s Aa1 bond rating with favorable remarks about how the city is managing it finances.
Prospects for regaining the top Aaa bond rating the city prided itself on for many years are still cloudy, according to Mr. Burmeister. The loss of the prized top bond rating, which gave the city the best borrowing rates and opportunities, made headlines in 2014. Mr. Burmeister said Moody’s analysts remarked that the city’s general fund is being run as strongly as a Aaa city, however he said Moody’s remains wary of cities with enterprise debt such as that the city took on to fund the DoubleTree by Hilton Cedar Rapids Hotel and Convention Center project.
Council members remarked on how closely the rates on the city’s revenue bonds and general obligations compared.
“These rates are extremely competitive and show our city is being run very capably by the city manager and financial director,” City Council Member Scott Overland said. The bonds will pay for a broad assortment of city needs, including many water and sewer upgrades.
Source: Corridor Business Journal, (Wednesday, May 10, 2017) Business Daily, retrieved online.