ATLANTA — Triple-A rated Greensboro, N.C., is selling roughly $63 million of debt today, marking the first deal since 2007 for the city.
The city is selling about $23.5 million of Series 2008 refunding bonds and issuing the rest as new money, Series 2008A. The refunding is expected to reap the city about $900,000 in net-present-value savings.
The deal is being sold competitively. Sidley Austin LLP and the Steve Allen Law Firm are co-bond counsel.
The maturities for the Series 2008A bonds range from 2009 through 2025. The refunding piece has maturities that range from 2008 through 2018.
Proceeds from the new money portion will be used for public improvement projects, including streets, parks, and recreational facilities.
Greensboro is rated triple-A by Fitch Ratings, Moody’s Investors Service, and Standard & Poor’s.
The city could issue $10 million of variable-rate general obligation bonds at the end of January.
One observer said the deals will likely be attractive to investors, mainly because the city is such a strong credit.
Fitch also affirmed outstanding ratings for other debt, including AA-plus ratings on $16.1 million of special obligation bonds and $7 million of certificates of participation.
Greensboro’s superior credit rating reflects its consistently strong financial operations and management, proactive planning for growth and development, a diversifying economy, and moderate debt levels with rapid amortization, Fitch analyst Alexandra Knight said .
“Although tax base growth had been sluggish in recent years and fund balance levels have declined, reserves and financial flexibility remain solid,” Knight said. “The fiscal 2008-2013 capital improvement plan projects a manageable amount of debt.”
Richard Marino, an analyst for Standard & Poor’s, added that Greensboro is in the Piedmont Triad area and is a major center for trade and services activities. That, according to one market player, is one of the reasons he believes the city would be able to weather any slowdown in the economy.Phone calls to Greensboro finance officials were not returned.
But one analyst noted that it was not until the beginning of 2006 that the city had triple-A ratings from all three major agencies. Moody’s upgraded the city to Aaa from Aa1.
Rating analysts say the city’s local economy continues to diversify and has recovered substantially from the impact of downsizing in the textile industry.
About 237,000 people call Greensboro home, and those numbers contribute to the overall strength of the economy. The city is the county seat for Guilford.
North Carolina has some of the highest-rated city and county governments in the Southeast, partly because of fiscal oversight provided by the state’s Local Government Commission, which works with credits on their debt management. The commission will act as financial adviser on the new money bonds while Banc of America Securities LLC will be financial adviser on the refunding bonds.
