The bond rating upgrade Bristol got last week paid off big this week.
At a Wednesday bond sale, the city managed to sell two different bonds at rates that officials never dreamed possible.
The results, which will save taxpayers as much as $250,000, were “beyond the wildest imagination,” said Mayor Art Ward.
Eastern Bank Capital Markets, based in Boston, bought up the city’s bonds with rates lower than even AAA-rated communities were able to secure on sales the previous day.
“We just set the new standard,” Comptroller Glenn Klocko. “Amazing.”
Finance Chairman Rich Miecznikowski said he “thrilled that we got such a great rate.”
David Bertnagle, the city’s chief accountant, said that because of the low interest rates the city has to pay to bondholders, there won’t be a need to raise the debt service payment levels in the budget.
He said that officials were eyeing the possibility of raising the payment level in the budget by as much as $250,000 next year alone in order to cover the borrowing tab. But that won’t be necessary, Bertnagle said, because the rates were so good.
“It looks like our hard work paid off,” said Matthew Spoerndle of Milford’s Phoenix Advisors, the city’s financial consultant.
A number of city leaders watched the bid projections on a wall in Klocko’s office as Spoerndle maneuvered through the iDeal website to show incoming bids.
They expressed amazement when they saw the long-term rate that Eastern Bank Capital Markets offered, beating out eight competing bids.
Sam Caligiuri, the city’s bond counsel, called the results “great” and a credit to the city’s fiscal management.
“It shows how well run Bristol is,” said Caligiuri, a Republican state senator.
The taxable bonds were sold to reimburse the city's rainy day fund for the money spent on the downtown mall site. The tax exempt bonds were sold to cover road, sewer and park projects.
Rates Bristol got
$8.9 million, 16-year tax-exempt bonds – 3.12 percent
$7.4 million, 1-year taxable note – 2.5 percent
Copyright 2009. All rights reserved.
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