Tetreau: Bond refinancing saves Aaa-rated Fairfield $1.45M
Published 10:51 am, Wednesday, April 1, 2015
The town has refinanced bonds first issued in 2007 and 2008, reducing future interest payments by about $1.45 million.
Moody's Investors Services has also re-affirmed the top Aaa rating for the town's bonds, and given Fairfield's finances a "stable" outlook for $29.2 million of general obligation bonds and $188.5 million in outstanding long-term general obligation debt, according to a release from First Selectman Michael Tetreau's office.
"This is great news for Fairfield," Matthew Spoerndle, senior managing director at Phoenix Advisors, the town's financial advisor, said in the news release. "Consistently being awarded the rating agencies' highest rating (Aaa) is truly a reflection of the town's strong financial management which only enhances the anticipated interest cost savings with this refinancing."
Spoerndle called the results of the recent bond refinancing "exceptional."
In 2007, the town issued $26.6 million in bonds, and refunded $14.5 million in the refinancing. Those bonds included $12.7 million for high school projects, $4 million for Burr Elementary School and $7.4 million for Tomlinson Middle School.
The bond issue in 2008 was for $28.3 million, with $9.2 million refunded. Those bonds included $13.4 million in financing for high school projects, $5 million for Tomlinson Middle School, $1.5 million for the Fairfield Metro Railroad Station, $1.8 million for fire suppression lines and $1.5 million to acquire land on Hoydens Hill.
"As a result of Fairfield's strong financial management and budgeted surpluses, our town has been fortunate to see the positive results of five consecutive years of general fund balance growth resulting in the total general fund balance increasing to $22 million of revenues," Tetreau said in the statement. "This balance growth has been the town's highest level of fund balance since 2003."
According to Moody's Rating Report, issued March 24, "Moody's highest long-term rating incorporates a stable and improving financial position which is supported by formal policies and strong management, as well as controllable liabilities for debt, pension, and OPEB. The stable outlook incorporates our expectation that Fairfield will maintain superior credit quality given an improving financial position and a large, favorably located tax base with strong resident wealth levels."
"We are very happy with the results of today's financing efforts," Chief Fiscal Officer Bob Mayer said. "Given the recent volatility in interest rates we are fortunate to have hit the market at a very opportune time."