City Saves Taxpayers $1.8 Million with Bond Refunding
MARICOPA, AZ – July 1, 2020
Taking advantage of low interest rates and upgrades from all three bond rating agencies, the City of Maricopa closed on the refunding of the voter approved general obligation bonds utilized to pay for the construction of Copper Sky. The refunding of the bonds resulted in interest savings of $1.8 million dollars that will be passed onto residents via a reduction in your secondary tax rate.
During the sale, the bonds received over $19 million in orders for the $9.9 million in bonds – resulting in a higher than expected NVP (Net Present Value) savings. “To get bond upgrades, a bidding war on our bonds, a quick sale with higher than anticipated returns, all during the COVID-19 crisis speaks tremendously to the fact that something special is happening here in Maricopa and the rest of the country is starting to see that,” stated City Manager Rick Horst.
S&P Global raised the City’s bond rating to ‘AA’ from ‘AA-‘. “The raised rating reflects our view of the city’s improved budgetary performance and maintenance of very strong available reserves,” said S&P Global Ratings credit analyst David Mares.
Moody’s Investors Service upgraded the City of Maricopa general obligation bonds to Aa2 from Aa3, the second upgrade in less than 10 months. “The upgrade to Aa2 reflects continued material improvement in the city’s tax base, fostered by rapid development and population growth. The city is well positioned to weather the impacts of coronavirus and impending recession, having demonstrated its management strength and financial flexibility through the last recession when reserve levels remained above 70%,” according to the news release published by Moody’s.
Fitch Ratings assigned a ‘AAA’ rating to the City of Maricopa, their highest score. The rating “reflects the city’s sound fiscal performance and conservative budget practices, which have maintained a strong degree of financial flexibility,” Fitch shared in their news release regarding the rating.
(Photo by City of Maricopa)