The City of Flagstaff sold $15.86 million in general obligation bonds today to fund voter approved projects including the final fire station, the emergency communication radio system, and a portion of the street/utility projects. In light of the excellent credit ratings from Standard and Poor’s and Moody’s (AA and Aa2, respectively), the City was able to get a 2.12% interest cost. This is the best rate the City has achieved on any general obligation bond.
“This is fantastic news for our community and our taxpayers, and demonstrates the City of Flagstaff’s strong financial position and reputation in the finance and bond market”, said City Manager Kevin Burke.
Some of the buyers for the City bonds included:
Breckinridge Investments
Edward Jones
Goldman Sachs
Morgan Stanley
Mutual of Omaha Bank
Northern Trust
U.S. Trust
Wells Capital Management.
Several weeks ago the estimate for interest rates on these bonds was 3.0 percent. In discussion with financial advisors last week that estimate was placed even lower at 2.3 percent. City taxpayers are the winners with today’s 2.12 percent rate. Based upon calculations, every 1/10th of a percent in the interest rate equals an additional interest cost to the City of $75,000 over the life of the debt. (Example: 2.22 to 2.12= $75,000)
