Norfolk will bring $17.5 million of general obligation capital public improvement refunding bonds to market in a competitive deal Wednesday to current refund a portion of its Series 1998 bonds.
Public Financial Management Inc. is financial adviser on the deal. McGuireWoods LLP is bond counsel.
The Series 2008D bonds grabbed a AA from Fitch Ratings. Fitch also affirmed its AA rating on the city’s outstanding $685 million of GOs. The outlook is stable. Ratings were not yet available from Standard & Poor’s or Moody’s Investors Service.
The AA rating reflects sound financial management, including comprehensive fiscal planning and monitoring, and a moderate debt burden with rapid amortization, along with a dominant military presence and below-average wealth levels, Fitch said in a rating report. The city’s solid general fund reserves and improving income indicators are also rating factors.
The unreserved general fund balance at the close of fiscal 2007 was $71 million, or 12.7% of spending, and Norfolk has structurally balanced its budget for the past two fiscal years after funding recurring expenses with surpluses earlier in the decade, according to Fitch.
Analysts also said the city’s debt levels are moderate, with overall debt equal to about 3.2% of assessed value and roughly $2,500 per capita. Norfolk’s capital improvement plan for fiscal 2009 through 2013 totals about $633 million and is focused primarily on utility and general governmental improvements.
Norfolk sold $153.6 million of Series 2008C GO capital improvement bonds to Citi at a true interest cost of 4.44% on June 17.
