Despite bleak outlooks from the three rating agencies, the town's attempt to refinance its bonds this week was wildly successful, officials said, resulting in the lowest interest rates in more than 30 years.
"Mayor Scott Jackson and Finance Director Sal DeCola are pleased to report that the town of Hamden completed the successful sale of $24,700,000 of 20-Year General Obligation Bonds and achieved the lowest overall effective interest rate -- 3.396 percent --that the town has received in over 30 years," according to a release from the mayor's office Wednesday.
"The Town’s financial advisor, Barry Bernabe, Vice President, Government Banking Group at Webster Bank, was pleased with the investor interest in the bond sale, stating that all of the bond issue was over-subscribed - meaning investor interest in the town’s bonds was very strong," it states.
The bond sale was held to permanently finance already approved and underway capital projects, including the New Police Headquarters/Memorial Town Hall Renovation project, and several annual capital improvement project packages that fund road paving, sidewalk repair, building improvements and more.
These projects were previously funded through short-term borrowing with Bond Anticipation Notes until such time that the town's administration and financial advisors decided that the time was right to turn the short-term borrowing into long-term bonded debt.
The town’s bonds are rated A2 by Moody’s, A by Standard & Poor’s and A- by Fitch Ratings.
“I am extremely pleased with the rates the town received. It shows investor confidence in Hamden’s strategy in stabilizing the Town’s finances and addressing the pension funding challenge," Jackson said. "The low interest rate will save hundreds of thousands of dollars in interest payments over the term of this capital expense.”