TOWN OF CHESHIRE
Great Results for Cheshire Bond Sale on Heels of Strong Rating Reports
CHESHIRE, Conn. – Town officials announced positive results from Wednesday’s $14.5 million bond sale, which yielded competitive interest rates on the strength of solid reviews from S&P Global and Fitch Ratings, two of the three major Wall Street Rating Agency firms.
“It is great to see these results and the fact that our bonds were in such a high demand,” said Town Manager Sean Kimball, “We are very pleased with these low rates as they keep our debt service costs, and the burden on the taxpayers, as low as possible.”
The Town received a total of twelve bids on the Bonds, with BNY Mellon submitting the winning bid. BNY Mellon beat out firms such as Bank of America Merrill Lynch, Citi, Janney Montgomery Scott, and Morgan Stanley, among many others.
The interest rates bid on the bonds ranged from a winning bid of 2.71% to a high bid of 2.91%. It was a tightly contested competitive sale with bids from the top seven firms within a range of only 8 basis points (0.08%). The bonds will provide the financing for the Town’s various school, general purpose and sewer projects.
“The sale results were driven by the Town’s exceptional credit ratings and prudent long term financial management. Many issuers would be happy with three or four bids; getting twelve is about as good as it gets,” said Matthew Spoerndle, senior managing director of Phoenix Advisors and Cheshire’s municipal advisor. “The rating agencies continue to recognize the work town officials have done to keep Cheshire’s fiscal health strong over the years.”
Both S&P and Fitch affirmed Cheshire’s “AAA” ratings, which is the highest rating available. Within the report, S&P referenced the Town’s “very strong economy” and “very strong liquidity and strong budgetary performance and flexibility” and noted the Town’s low unemployment rate and healthy building permit growth. Fitch also highlighted the Town’s long term liabilities (debt & pensions) as being “low” with moderate future borrowing plans based on its capital plan, which is favorably viewed.
Finally, S&P mentioned that they view management as “strong, with good financial policies” under their Financial Management Assessment while Fitch touted management’s ability to address recent fiscal strains as a result of the state economic downturn through cost controls, and other measures.
The settlement date for the sale is March 6, 2019, after which the funds become available to the Town.