Debt Refinancing Projected To Save Manchester $1 Million-Plus

MANCHESTER, CT — Manchester has restructured portions of its municipal debt in an effort to save more than $1 million over the next decade.

Manchester General Manage Scott Shanley made the announcement Monday. He said the town has taken advantage of "low-interest rates and the town’s excellent bond ratings" to refinance portions of existing debt.

On April 29th, town officials successfully issued $15.6 million in general obligation refunding bonds at a net interest cost of 1.7 percent, a record-low interest rate, Shanley said.

The estimated savings is projected at $1,072,047 in debt service costs over ten years.

Manchester also maintained what are considered excellent bond ratings by the two major municipal ratings agencies. Fitch Ratings classifies Manchester as a perfect AAA while Standard & Poor's Global Ratings affirmed Manchester's AA+ rating, the second-highest bond rating it assigns.

"This is great news for Manchester as we work to build a stronger and more equitable community coming out of the pandemic," Manchester Mayor Jay Moran said. "The AAA bond rating and positive response to this bond sale, is proof that Manchester is in a strong financial position to meet the future needs of our community."

According to Fitch, Manchester's AAA rating "reflects the town's strong fiscal management
and stable financial position, as well as its vibrant economy, with access to a broad and diverse
metropolitan statistical area." The rating also takes into account Manchester's "conservatively managed debt profile and management's full funding of actuarially determined pension contributions."

Shanley said, "Our reaffirmed top-notch credit rating and successful bond issuance reflects Manchester's strong economy and the town’s prudent financial management via support of the Board of Directors. Given the economic headwinds caused by the COVID-19 global pandemic,
the results are especially notable."

In its rating, S&P Global Ratings highlighted Manchester's prudent financial practices that "have led to consistent and predictable financial performance, which we expect will continue."

S&P also noted touted Manchester's "diverse industrial and commercial base, strong management, good financial policies and practices and strong budgetary performance," as the rationales for the high rating.

S&P added that, "We expect costs to remain manageable and note that the town has taken
steps to limit its retirement obligation liability. This includes changing health benefits, incorporating employee contributions into new contracts, and moving the new hires except for Police and Fire to defined-contribution retirement plans."