Buffalo, N.Y., Saves With $32 Million Refunding

Buffalo, N.Y., sold $32 million of school refunding bonds on Thursday, saving about $6.6 million in interest costs.

“There was a strong demand from both retail and institutional investors, which is a testament to the city’s sound financial condition,” said Buffalo’s comptroller, Mark Schroeder.

The city was upgraded by Moody’s Investors Service in April to A1 from A2. Standard & Poor’s assigned the bonds an A and Fitch Ratings assigned an A-plus.

In July, the New York State-appointed control board, the Buffalo Fiscal Stability Authority, transitioned to an advisory period from a control period, based on Buffalo’s improved finances. Under the advisory period, the authority no longer has control over the city’s finances.

By refinancing its 2002 school bonds, the city was able to lower its interest rate by more than three percentage points to 2.15%, according to a statement from the comptroller’s office.

“Buffalo’s improved bond rating is continuing to pay off, and taxpayers are reaping the benefits,” Schroeder said.

He pointed out that the 2.15% interest rate is lower than rates from some of Buffalo’s record-breaking bond sales this spring, which were 2.25%, 2.48%, and 2.96%.

Raymond James | Morgan Keegan priced the bonds and Harris Beach PLLC was bond counsel.

The bonds, which are general obligations of the city, will mature in 2023 and 2024.

Schroeder said that Buffalo will be refinancing more of the school district’s debt later this month, with budgetary savings expected to exceed $13 million.

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