The City of Amesbury received 7 competitive bids from bond underwriters on Wednesday, May 20th for a $31,180,000, 20-year general obligation bond issue, with Robert W. Baird & Co., Inc. winning the bid. The total bond issue was for $34,770,000 (bond premium net of underwriting and issuance costs reduced the bond amount to $31,180,000), with a TIC (true interest cost) of 1.89%.
The breakdown is as follows:
- Amesbury Elementary School project: $30M
- South Hunt Infrastructure project DIF: $3.27M
- Athletic Fields project: $1.5M
Prior to the sale, S&P Global Ratings, a municipal bond credit rating agency, assigned its ‘AA’ long-term rating and underlying rating to Amesbury. The rating agency cited the Amesbury’s very strong economy, very strong liquidity, and strong institutional framework as positive credit factors.
“I am pleased we were able to lock in such a competitive interest rate for the City in what has been a highly volatile bond market. Our team has been preparing for this bond sale (which includes $30M for the construction of the new Amesbury Elementary School) for several months and were prepared to enter the market once rates stabilized after the March crash. The favorable interest rate was due in part to the City’s positive financial stability and institutional framework as confirmed by Standard & Poor’s recent rating of (AA) which was released last month," stated Angel Wills, Chief Financial Officer for the City of Amesbury.
In June 2019, the City Council approved an order to appropriate $60,513,570 for the Amesbury Elementary School Project. The Massachusetts School Building Authority grant will reimburse up to $24,466,254 of the Total Project Budget.
Mayor Kassandra Gove stated, “we continue to make progress on the Amesbury Elementary School project, and it was important that we secured this funding as we incur expenses. We are following through on the plan that was proposed and that Amesbury residents voted in favor for, and we have already begun to receive reimbursement payments from our MSBA grant for this project. The School Building Committee is paying close attention to the Total Project Budget to make sure that we stay on track.
Keeping our AA bond rating is really a testament to Angel, and all of her hard work keeping our finances on track and taking swift action during this tough time. It’s also a credit to our City staff and boards who have been keeping economic development projects moving and paints a bright economic picture for Amesbury. Finally, I have to say thank you to our local businesses, many of whom pivoted during the COVID-19 outbreak to stay open and serve our community. It was the combination of these things that had S&P pointing to our strong economy as one reason for keeping our AA rating.”