NEW ROCHELLE, N.Y. – Fresh on the heels of earning its top bond rating from Moody’s Investors Services in 80 years, New Rochelle officials announced that they’ve saved the city millions of dollars through a series of bond refinancing.
With Moody’s officially giving the city a “positive outlook,” city officials took advantage of low market interest rates, selling more than $4 million of general obligation refunding bonds – more commonly referred to simply as refunding bonds – to replace higher interest bonds that were issued in 2005 and 2007, when the both the city’s fiscal future and economy were not as strong.
According to city officials, “the maturity schedule of the refunding bonds mirrors that of the issue being refunded,” producing a budgetary savings of $230,000 over the next 12 years, marking an average savings to taxpayers of approximately $20,000 annually.
In the official Moody’s report, investigators specifically credited “the city’s large tax base and above-average wealth levels. The rating also takes into account the city’s adequate reserve position and low debt burden. The positive outlook reflects the city’s recent transition from deficits to surpluses and the expectation that this trend will continue.”
Finance Commissioner Howard Rattner noted that the designation awarded to New Rochelle by Moody’s is the highest rating the city has received in nearly a century.
“The designation of positive outlook is a major accomplishment and represents the highest rating achieved by the city in the past 80 years,” he said. “Continuation of our present budgetary practices will insure the future financial stability of the city.
City officials stand set to close on the bonds as early as the first week of July. The refunding bonds will be held in escrow until the “respective redemption dates of the existing bonds.”
City Manager Chuck Strome III said that this is just the latest step officials are taking to reduce any financial burden on local taxpayers.
“This is another example of our diligent efforts to reduce our budgetary expenses without impacting the services provided to our taxpayers,” he said. “The sale of the refunding bonds at very favorable interest rates attests to the strength of the city’s credit worthiness.”
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