Norfolk, Va., has completed the sale of $212.2 million sale of municipal bonds, which included the use of three different federal stimulus programs to save more than $5 million in debt service payments over traditional tax-exempt financing, according to syndicate leader Morgan Keegan & Co.
The sale priced Jan. 14 and included recovery zone facility bonds, Build America Bonds, and recovery zone economic development bonds. Proceeds will pay for capital projects, including a courthouse, a light-rail starter line, parking, and stormwater and wastewater facilities.
The bonds were rated A1 by Moody’s Investors Service, and AA by Standard & Poor’s and Fitch Ratings.
“Norfolk’s strong bond ratings and well-known name provided the foundation for a very attractive offer with more buyers than there were bonds,” finance director Darrell Hill said in a release.
The city’s issuance of $117.6 million of BABs was the largest of any Virginia municipality to date, officials said.
BABs are taxable bonds with a 35% rebate on interest costs from the U.S. Treasury. RZEDBs are eligible for a 45% rebate on interest from the Treasury. Recovery zone facility bonds are tax-exempt private-activity bonds from which issuers receive a federal subsidy that equals 45% of interest costs for the bonds.
Other underwriters on the deal were Morgan Stanley, BB&T Capital Markets, Bank of America Merrill Lynch, and Wells Fargo Securities. Public Financial Management Inc. was financial adviser. McGuireWoods LLP was bond counsel. Kaufman & Canoles PC was underwriters’ counsel.
