Boston to Sell $176M in GO Bonds

Boston plans to sell about $176 million of tax-exempt, fixed-rate general obligation bonds on Thursday.

Public Financial Management Inc. is the lead manager.

Proceeds from the $152 million sale of Series A new-money bonds will benefit capital improvement projects, notably the construction of a municipal building in the Roxbury neighborhood’s Dudley Square. The city funds its capital plan primarily through GO bonds and external grants.

Series B bonds, totaling roughly $24 million, will partially refund  Boston’s 2003A, 2005A and 2006A series for an expected net-present value savings of $1.5 million, or 5.9% of refunded principal with no extension of maturity.

Moody’s Investors Service and Standard & Poor’s rate the bonds Aaa and AA-plus, respectively.

The city has anout $1.1 billion in GO debt outstanding, according to Moody’s.

Boston, the 625,000-population capital of Massachusetts, generally sells its GO bonds in February or March, but the city also sold nearly $30 million last September.

“We received a very, very positive response from bondholders, and we anticipate a similar response this time. Boston is known as a solid bet, a safe bet,” the city’s chief financial officer, Meredith Weenick, said in an interview.

“Boston has a reputation for conservative long-term management. Nowhere is there a sense of horror that you see in other cities. We’ve also been lucky in that Boston was hit less hard by the recession.”

Moody’s based its rating on “Boston’s strong financial position, despite recent transfers from general fund reserves, and the city’s substantial and economically diverse tax base.”

Revitalizing Dudley Square, which has long served as a major transportation and business hub in Roxbury, has been a priority for Mayor Thomas Menino. The municipal building is scheduled to open in fall 2014.

Edwards Wildman Palmer LLP is the city’s bond counsel.

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