North Carolina's Local Government Commission approved requests from the Fayetteville Public Works Commission to issue $163 million in bonds and from Charlotte to issue $200 million in short-term bonds Tuesday.
The Fayetteville commission is scheduled to price the bonds on a competitive basis on Oct. 21.
The bonds are expected to have a 30 year term, with the first two years only paying interest and the remaining years paying principal and interest.
The public works commission currently expects the bonds to be rated Aa2 by Moody's Ratings, AA by S&P Global Ratings and AA by Fitch Ratings.
The money will be used to acquire, construct and equip various improvements to its electric, water and sewer systems, with the money roughly equally distributed between the three work types. The public works commission plans annual water, wastewater, and electric rate increases.
First Tryon Advisors is the municipal advisor. The Bank of New York Mellon Trust Company is the bond trustee. NewGen Strategies & Solutions, LLC is the utility consultant.
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The bond is to pay at a variable rate, calculated at 79% of daily SOFR, plus 27 basis points. Interest is to be paid on the first day of each month, with the first payment on Dec. 1.
The general obligation bond will have an initial maturity of Nov. 13, 2028, and an extended maturity of Nov. 13, 2031.
Charlotte will use the money on an as needed basis for various transportation projects.
