NORWALK, Conn. — The city went forward with a $35 million bond sale Tuesday to pay for school construction and other capital improvements projects.
Mayor Harry W. Rilling said the Department of Finance secured an interest rate of 2.28%.
"Looking at the other communities, our rate is the lowest we've seen so far, and we would end up saving approximately $780,000 in interest costs over the period of the loan," Rilling said. "I'm very pleased. We feel that Norwalk's 'triple-A' bond rating and the fact that we're investing in our infrastructure played a major part."
The method of sale was competitive with bids being accepted electronically via the PARITY online bidding service.
The true interest cost for the winning bidder was 2.28% submitted by Bank of America Merrill Lynch. The city received nine bids, rates from 2.28% to nearly 2.42%. Three other Fairfield County municipalities recently issued general obligation bonds, and all had achieved a TIC hovering around 2.7%, according to the Norwalk Department of Finance.
The 2.28% interest rate falls between the 1.87% rate secured in 2016 and 2.57% rate achieved in 2015.
According to city officials, Norwalk's debt remains attractive to municipal bond investors due to the city's superior bond rating and strong reputation in the market.
Moody's Investors Service, S&P Global Ratings and Fitch Ratings recently reaffirmed the Norwalk's Triple-A Bond rating, which allows the city to borrow money at the lowest possible interest rates. Selling bonds with a triple-A rating rather than a double-A rating will save Norwalk taxpayers approximately $781,000 in interest costs over the life of the issue, according to city finance officials.
The bonds will pay for $20.9 million in city capital projects, including road paving and reconstruction, $8.5 million in Board of Education school construction and district technology projects, and $5.6 million in urban renewal and redevelopment projects. The school projects include the expansion of Ponus Ridge Middle School and construction of a South Norwalk School at the Nathaniel Ely site.
The Common Council recently month authorized the refinancing of up to $30 million in existing municipal bonds. The refinancing is expected to occur in August. The city's finance department routinely monitors the market in search of savings through refinancing.
