VIRGINIA BEACH, Va. (WAVY) — City officials announced Friday Virginia Beach has saved taxpayers $9.9 million by refinancing $60.1 million in bonds.
Officials say the city’s strong credit ratings of AAA, AAA, and Aa1 on its Water and Sewer system made the savings possible.
On Sept. 15, the City Council approved a Bond Resolution authorizing the distribution of the Preliminary Official Statement in connection with the issuance of Water and Sewer System Revenue Bonds, Series 2020A and 2020B in the maximum amount of $111 million, comprised of up to $50 million for new money and $61 million for refunds.
On Oct. 14, the city sold a total of $96.7 million comprised of $45.6 million in new money and $51.1 million in refunding Water and Sewer System Revenue Bonds. The refunding resulted in present value debt service savings of $9.9 million over the remaining 16-year term of the refunded bonds, or 16.5% of the refunded bonds.
Six electronic bids were received from various investment banking, securities brokerage, and financial services firms on the Water and Sewer System Revenue and Refunding Revenue Bonds. The bonds were awarded to Raymond James & Associates, Inc. at a true interest cost of 1.6%.
“Given favorable market conditions and the City’s water and sewer system’s strong credit ratings of AAA (Fitch), Aa1 (Moody’s) and AAA (S&P), the City sold bonds at the lowest rate ever for City’s Water and Sewer new money and refunding bonds,” stated Virginia Beach Director of Finance Alice Kelly. “Maintaining strong credit ratings allows the City to receive the lowest rates, which in turn saves the taxpayers money.”
Read the full release and more on the ratings here.