The
City of Richmond successfully sold $502 million in Public Utility Revenue and
Refunding Bonds of which $169 million was for new money projects and $333 million
was to refund existing debt service for interest rate savings in 2016.
The
cost of funds for the City’s New Money Projects was approximately 3.47 percent, which
is near the lowest cost of funds in several decades. In addition, the City took
advantage of the historic low interest rate environment to refund two
outstanding bond issues, which will result in the City reducing its existing
debt service by roughly $100 million over the next 24 years.
The
Bonds were highly rated by all three national credit rating agencies: Moody’s,
Standard & Poor’s and Fitch (Aa2, AA, AA respectively).
Wells
Fargo, Bank of America, Raymond James and Siebert Cisneros Shank served as
underwriters on the financing. Wells Fargo, Bank of America and Raymond James
have offices in Richmond. Siebert Cisneros Shank is based out of New York and
is the nation’s largest minority owned bond underwriting firm.
David
Rose, senior vice president and manager of Public Finance at Davenport &
Company LLC, the City’s financial advisor, said “As best we can determine, the
level of debt service savings is unprecedented for a Virginia local
government.”
