Norfolk plans to competitively sell $153.2 million of general obligation capital improvement bonds on June 17. The debt will finance water and wastewater funds, according to the preliminary official statement.
Public Financial Management Inc. is financial adviser on the deal. McGuireWoods LLP is bond counsel.
Standard and Poor’s and Fitch Ratings rate the upcoming sale and city’s $536 million of outstanding GOs AA with a stable outlook, and Moody’s Investors Service rates the credit A1.
Fitch said the AA rating reflects the city’s sound financial management, including comprehensive fiscal planning and monitoring; a moderate debt burden with rapid amortization, and the area’s large military presence.
Norfolk, with an estimated 2007 population of about 236,000, is located in the Hampton Roads region of the state. It is home to the world’s largest naval complex and the city’s economic activity and employment base is concentrated in military-related activities, although over the past several years, significant retail, commercial, and tourism activity has enhanced the city’s economic diversity, according to analysts.
The city’s solid general fund reserves and improving income indicators also affected the rating. Norfolk expects to end fiscal 2008 with a small general fund surplus and the fiscal 2009 approved budget represents a modest 4% increase from the adopted budget for fiscal 2008, as officials anticipate slower growth in the tax base due to the softening housing market and the escalation of fuel and energy costs, Fitch said.
Norfolk last went to market in January when it sold $12 million of GO refunding bonds to BB&T Capital Markets Inc. for a true interest cost of 2.81%.
