Pittsfield Sells $28M Bond, Rates High For Bond Credit
PITTSFIELD, Mass. — The city of Pittsfield sold a large bond for financial health and scored the highest possible rating by a municipal bond credit rating agency.
Last week, the city sold a $28,420,000 bond. The transaction includes refinancing of $10 million of older bonds that will provide gross budget savings of $1,049,382 for the city over 10 years and support various municipal projects.
Projects in the borrowing include the Tyler Street Streetscape Design for $200,000, Clapp Park improvements for $355,000, Springside House exterior renovation for $400,000, and the Tyler Street and Woodlawn Avenue intersection design at $185,000.
In a press release, Finance Director and Treasurer Matthew Kerwood said taking advantage of these refinancing opportunities are key components in controlling the city's debt. Bond proceeds will refinance city bonds originally issued March 1, 2008, Oct. 1, 2010, and Jan. 15, 2011.
This type of refinancing is a common occurrence and supports the city's debt management strategy. The bids for the bonds and notes were accepted in Boston at the offices of the city’s Financial Advisor.
Kerwood explained that the city also issued $7 million in bond anticipation notes along the way in separate transactions that are a part of the larger bond. These are short term, interest-bearing security issues in advance of a larger, future bond issue.
"We do this as a regular thing, sell bonds and bond anticipation notes in a cycle doing an issuance in February and then an issuance in June," Kerwood said. "When we do bond anticipation notes, those are like short-term loans, and then when those loans mature we either roll them or we ultimately then take out a long-term loan which again is through the sale of a bond."
In addition, the city is scoring high in bond credit ratings.
Municipal bond credit rating agency S&P Global Ratings cited the city's "strong budgetary flexibility, very strong liquidity, and strong institutional framework" as positive credit factors. Because of this, Pittsfield was rated an "A-plus" underlying bond rating by the agency and assigned the highest short-term rating: Standards & Poor's plus-1 to the notes.
S&P Global Ratings also assigned the "AA" enhanced rating to the bonds as debt service is secured by the State Qualified Bond Act local state aid intercept program.
This confirms the city's sound financial stance, Kerwood said, and is reportedly why the city is able to attract quality buyers to the bond issuances.