Bond refunding saves Milford $1.4 million
MILFORD — On Wednesday, Milford Mayor Ben Blake announced that the city will capture $1.4 million in taxpayer savings by refinancing decade-old bonds on a day when interest rates for municipal bonds were at record low levels and subscriber demand for Milford’s AAA bonds was high.
The city refinanced bonds originally issued a decade ago at higher rates than the current environment. As a result of the refinancing, Milford will lower its interest costs by over $1.4 million.
The $16,460,000 refunding bonds will refinance bonds originally issued in 2010 and 2012 that have reached the “call date,” or the date at which the city may refinance on a tax-exempt basis. The proceeds of those issues were originally used to fund various school, sewer and public improvement projects.
According to Blake, “This is outstanding news for Milford. We will be able to use the savings to provide tax relief for upcoming budgets.”
“We constantly review Milford’s portfolio of bonds and look for opportunities to refinance debt to lower interest rates. These excellent results will help us maintain manageable debt service costs,” said Peter Erodici, director of finance.
“The municipal market has experienced extreme volatility since mid-March with the onset of the pandemic and subsequent hysteria,” said Matthew Spoerndle, Milford’s municipal advisor.
“Since then, rates have come down to levels that we have never before seen. Being able to save the city money, especially in these challenging times, is truly outstanding. Congratulations to the city!”
The historic bond refunding comes on the heels of a financial rating review wherein the nation’s premier rating agency, Fitch, reaffirmed Milford’s AAA bond rating, the highest possible credit grade a city can receive.
The AAA rating is based on low debt levels, well-funded retiree costs, superior financial management, healthy reserves, and a history of successful access to the municipal bond market. This credit score demonstrates the city’s fiscal health and reveals how markets view Milford’s creditworthiness. More importantly, this notable evaluation exposes the city’s strong and growing economy.
"The AAA rating reflects Milford’s strong government, rocketing economy and remarkable community," Blake concluded. “We will continue to exercise careful planning and prudent financial management to allow our city to thrive.”