A portion of the bonds refinanced outstanding debt, generating savings of $1.2 million over the life of the bonds.
NORFOLK, VA – The City sold $82.9 million of General Obligation Bonds on March 3, 2020, achieving the lowest interest rate in its history of long-term borrowing at 1.94%. A portion of the bonds refinanced outstanding debt, generating savings of $1.2 million over the life of the bonds. The sale follows the City’s recent upgrade of the City’s underlying credit rating with Standard & Poor’s Global from AA+ to AAA. As the financial markets reacted to the global developments of the coronavirus, the City and its team mobilized very quickly to lock in borrowing rates at all-time historically low levels.
The bonds were sold in two series, consisting of $37.3 million to fund new projects and $45.6 million to refinance outstanding bonds. The new bond proceeds will be used to fund previously approved capital projects such as roads, bridges and street flooding and other capital projects belonging to the storm water system and wastewater system. The refunding allowed the City to issue the new debt at a substantially lower interest cost than the City’s debt that was refinanced, resulting in $1.2 million in net present value savings over the life of the bonds.
Norfolk’s taxpayers should take pride in knowing the City is committed to actively managing its debt in order to minimize its interest expense.
The bonds were sold utilizing a syndicate led by Citigroup Capital Markets and two co-managers Raymond James & Associates, Inc. and Wells Fargo Bank, National Association.