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07/24/2019 12:00 AMOn May 21, the Town of Westbrook sold $7.185 million in tax-exempt General Obligation Refunding Bonds to refinance certain longer-dated maturities of the town’s 2010 Refunding and 2011 Refunding bond issues. Specifically, the new bonds will replace bonds originally issued to fund various town and Board of Education projects. As a result of the town’s excellent credit rating and its respected name in the municipal bond market, the managing underwriter for the issue, Roosevelt & Cross Inc., received orders to place all the bonds available.
With the refinancing, the town will save more than $361,000 in debt service over the term of the bonds. On a net present value basis, the debt service savings equated to approximately 4.4 percent of the prior bonds, or more than 1.5 times the minimum savings threshold recommended by the Government Finance Officers of America. The new bonds will have a final maturity of July 2026 and carried an effective interest of 1.556 percent.
The bonds were rated “Aa2” by Moody’s Investors Service, the third-highest rating offered by the rating agency. In its credit rating report, Moody’s noted the town’s stable financial position, supported by formally adopted policies, conservative budget practices, and low fixed cost. Further supporting the rating is the town’s very strong resident income and wealth profile. The town was assisted in this transaction by Day Pitney LLP, bond counsel, and Hilltop Securities Inc., municipal advisor.
First Selectman Noel Bishop has said that this refunding of our bonds is further testimony of the town’s very strong financial position and strict budgeting guidelines.