Sold: $45 Million Bond Sale, Largest In Town History

BRANFORD, CT — The town sold $45 million in long-term bonds through a competitive bid process, the largest in Branford's history, according to a press release.

And, the town has earned the highest of S&P Global ratings, a “AAA” bond rating, town officials announced.

Bond proceeds will be used to finance the renovation, expansion and building addition projects for Walsh Intermediate School ($88.2 million), Community House ($12.1 million), and Blackstone Library ($5.2 million).

First Selectman James B. Cosgrove and Finance Director James Finch say Branford’s debt is "attractive to municipal bond investors because of the Town’s superior bond rating and reputation in the market."

The bonds were purchased by Mesirow Financial Inc. at an effective interest rate of 2.31 percent. Officials said the Town received nine bids on the bonds, with effective rates ranging from 2.31 percent to 2.63 percent. The bonds will mature over a 20-year period.

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 2018 of 25% of operating expenditures;
• Very strong liquidity, with total government available cash at 44.3% 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 6.4% of expenditures and net direct debt that is 66.5% of total governmental fund revenue, as well as low overall net debt at less than 3% of market value.

“Branford’s financial strength distinguishes Branford from other public entities," Cosgrove said, noting "that 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”.

Though Cosgrove said the town expects an "increase in our debt service costs in the near term, Branford taxpayers will not see a large spike in the debt service budget due to careful and deliberate planning.

Finch said the town's good financial position owes to "prudent budgeting," the "discipline" of town officials "in funding current and future liabilities.”

"This approach will take some of the guesswork out of future bonding costs and assist town leaders in developing future budgets," Finch said.

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.