PRESS RELEASE Historic Results for Westport Bond Sale on Following Strong Rating Report
WESTPORT, Conn. – First Selectman Jim Marpe announced positive results from Tuesday’s $34.4 million bond sale, which yielded competitive interest rates on the strength of solid reviews from Moody’s Investors Service, one of the three major Wall Street Rating Agency firms.
“It is great to see these results and the fact that our bonds were in such a high demand,” said Mr. Marpe. “We are very pleased with these results as they keep our debt service costs, and the burden on the taxpayers, as low as possible.”
He continued, “I would like to thank Westport’s Director of Finance, Gary Conrad and his staff for assembling the volumes of information required to prepare for this offer at the same time that our annual budget was being finalized, all during this unprecedented health crisis. My thanks also to our long-time municipal bond consultants at Phoenix Advisors who once again have steered us to an extremely successful bond issue.”
The Town received a total of ten bids on the Bonds with Morgan Stanley & Co. submitting the winning bid. Morgan Stanley beat out firms such as FHN Financial Capital Markets who was the second place bid, Citi, JP Morgan, Janney Montgomery Scott, and Piper Sandler, among others.
The interest rates bid on the bonds ranged from a winning bid of 1.93% to a high bid of 2.10%. It was a tightly contested competitive sale with bids from the top nine firms within a range of only 10 basis points (0.10%). The bonds will primarily finance renovations at Coleytown Middle School along with a number of other smaller projects including Synthetic Turf Fields at the track at Staples High School and a number of other public improvement projects.
“Considering the extreme municipal market volatility that we experienced in mid-March, today’s results cannot include enough superlatives,” said Matthew Spoerndle, senior managing director of Phoenix Advisors and Westport’s municipal advisor. “It’s very rare to receive double digit bids on a sale, and even more rare for a 20-year bond to sell at an interest rate under 2%. Congratulations to the Town!”
Moody’s affirmed Westport’s rating at Aaa, which is the highest rating available. Within the report, Moody’s referenced the Towns “large, stable tax base with extremely strong income and wealth levels” and “stable financial position” while also noting that “management's willingness to aggressively address liabilities” like pensions and other post-employment benefits is a credit strength. Also of note is the fact that the Town’s debt ratios are in line with national Aaa medians. The Town will be retiring roughly 74% of all existing debt over the next 10 years which is viewed very favorably.
Moody’s also mentions the Town’s “history of financially stable operations, conservative budgeting practices and target fund balance policy” among the factors influencing the Town’s high credit rating. This has become increasingly important since the forward-looking view is tenuous at best for many sectors as a result of the effects of the COVID19 pandemic.
The settlement date for the sale is May 27, 2020, after which the funds become available to the Town.