Buffalo, with a fresh upgrade, delayed a $35.7 million refunding that had been tentatively scheduled for last Thursday due to market conditions.
The city planned to market its general obligation bonds last week if it could meet a target present-value savings of $2 million but fell short, said J. Chester Johnson, chairman of Government Finance Associates Inc., Buffalo’s financial adviser.
The deal has been on the day-to-day calendar. The city plans to hold a pre-pricing call on Monday with lead underwriter Sterne, Agee & Leach Inc. to discuss when to go market, Johnson said.
On Thursday, Standard & Poor’s upgraded Buffalo’s GO debt to A with a stable outlook from A-minus, citing continuing improvement in financial operations. Buffalo’s strong performance includes six years of operating surpluses and the accumulation of “substantial” general fund reserves, the agency said.
“Through aggressive expenditure controls and favorable state aid funding, the city’s financial profile has improved over the last six years,” Standard & Poor’s said. “The city has experienced a sizable increase in its liquidity and cash position, eliminating the need for cash-flow borrowing since 2008.”
Other positives include the city’s adoption in its charter of the financial management practices of the Buffalo Fiscal Stability Authority, an oversight board.
As offsetting factors, Standard & Poor’s cited the city’s dependence on state aid, ongoing labor negotiations, low wealth, and declining population.