Branford's Bond Rating 'Reaffirmed' As 'AAA'

BRANFORD, CT — The town's bond rating was "reaffirmed" last week as “AAA” by S&P Global Ratings, the highest rate assigned, town officials announced.

Branford priced $13,105,000 in medium-term bonds through a negotiated sale underwritten by Piper Sandler, officials said. The bonds included $5.4 million of refunding bonds previously issued through the state's Clean Water Fund. The refunding bonds will mature in 2025 and were priced at an effective rate of 0.48% saving the town $195,000 in debt service costs over the life of the bonds.

The remaining bonds will mature in 2037 at an effective rate of 1.87%.

The bond proceeds will be used to finance the renovations to the Walsh Intermediate School and improvements to the Town’s infrastructure.

According to town officials, "Branford’s debt is attractive to municipal bond investors during these times of uncertainty because of the Town’s strong bond rating and reputation in the market."

First Selectman James Cosgrove said "Branford’s financial strength distinguishes Branford from other public entities." He also said "it is refreshing that Branford’s financial health is consistently recognized by a national rating agency whose reports and analysis are utilized by investors and institutions."

In its report issued in advance of the sale, S&P Global Ratings noted the following:
• A very strong economy, with access to a broad and diverse metropolitan statistical area;
• Strong management, with good financial policies and practices under our Financial Management Assessment (MSA) methodology;
• Very strong budgetary flexibility, with an available fund balance in fiscal 2019 of 28% of operating expenditures;
• Very strong liquidity, with total government available cash at 42.6% of total governmental fund expenditures;
• Strong budgetary performance with balanced operating results in the general fund;
• Strong debt and contingent liability position, with debt service carrying charges at 6.7% of expenditures and net direct debt that is 69.1% of total governmental fund revenue, as well as low overall net debt at less than 3% of market value.

Finance Director James Finch said in a news release that he was "very satisfied with the rating."

He said Branford’s sale accomplished four goals:

• Refund and restructure the Clean Water Fund obligations to save money;
• Pair the refunding with a new money borrowing to save on issuance costs;
• Take advantage of the low rate environment to fund infrastructure need;
• Utilize FY 2021 debt service savings to reduce future bonding requirements;

Finch was "also pleased that the rating agency recognized the efforts of the town in reducing its Other Post Employment Benefit liabilities while continuing to acknowledge the discipline of current and past officials including, but not limited to, the Board of Finance and RTM in funding the remaining liabilities".

The Town was assisted in the sale by Hilltop Securities Inc. of Madison as municipal advisor and Joseph Fasi LLC of Hartford as bond counsel.