Board of Finance (BOF) chair Joe Mooney congratulated Finance Director Jim Finch (pictured) last night for successfully refinancing $18.8 million in outstanding bonds and for achieving a continuing Triple A bond rating, according to Standard and Poor’s most recent analysis.
The announcement that Branford continues to hold the Triple A rating means the town has a consistent favorable financial performance, is a strong and stable revenue source and continues to have strong financial management: it has held the rating since 2009. (A town’s rating is not a reflection of its wealth.)
“The continued low-interest rate environment coupled with an approaching call date provided the opportunity to issue the refunding bonds, which is analogous to a homeowner refinancing their mortgage,” First Selectman Jamie Cosgrove said in a prepared statement. “Additionally, the Town restructured the refunding bonds to enhance the savings.”
Finch has guided the town’s financial health for many years. He did so again in recent months as he sought to refinance $18.8 million in outstanding bonds and to partially finance sewer pump improvements, the demolition of Branford Hills School, various school building upgrades and a new design for the Community House, which will include a new renovation of the building for senior use.
Finch told the Board of Finance last night that the town achieved two transactions for the price of one. He also said the town wanted to reaffirm the town’s Triple A bond rating. And it did. “We were successful. The town will benefit,” he said at the finance meeting last night. Mooney said the board was pleased. “Congratulations,” he said to Finch, smiling.
Some months back Finch decided to seize the opportunity to refund certain town bonds, which were approaching a call date. Last week he and town succeeded. Before the town could act, however, it needed the approval by the BOF and the Representative Town Meeting (RTM), which quickly and unanimously approved the bonding initiative at a special set of meetings last month. That was because the town had to act by the April deadline. On April 21 the town issued $19.8 million of general obligation bonds.
In outlining the reasons for refinancing Finch told the BOF last night that the refunding will produce $1.65 million in savings over the life of the bonds.”
Town officials negotiated the issue with Piper Jaffray, of Minneapolis, Minnesota, a municipal bond underwriting firm with the assistance of Independent Bond and Investment Consultants of Madison as municipal advisor, and Joseph Fasi, LLC, of Hartford as bond counsel.
Finch and Cosgrove said they went into the bond sale with four objectives in mind.
They wanted to produce budgetary savings over the life of the bonds, restructure the outstanding maturities by rapidly paying down debt to provide the capacity for future projects, combine the refunding issue with new money borrowings to reduce transaction costs as compared to issuing each issue separately, and reaffirm the Town’s bond rating.
Cosgrove said he was very pleased that Standard and Poor’s had reaffirmed the town’s Triple A bond rating. Factors influencing the rating were: A strong debt and contingent liability profile, a diversified tax base, a healthy economy, and strong liquidity.
###
