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City obtains some of the lowest long-term debt rates in San Antonio history to finance critical capital projects for the community

Published on Friday, August 28, 2020

City obtains some of the lowest long-term debt rates in San Antonio history to finance critical capital projects for the community

Rates due to the City’s recently reaffirmed credit ratings and current market conditions

CONTACT: Ashley Alvarez, 956-241-6007
ashley.alvarez@sanantonio.gov

 

SAN ANTONIO (Aug. 28, 2020) – This week, the City of San Antonio obtained some of the lowest rates for long-term debt in the organization’s history. Lower rates provide millions of dollars of savings on interest, lowering the overall cost of the 2017-2022 Bond Program approved by the voters.

 

“The ability for the City to obtain these historically low rates, as well as reaffirmation of bond ratings, represents our ability to be good stewards of public funds and a continued confidence by the rating agencies in the City’s financial position,” said City Manager Erik Walsh. “We continue to be the best financially managed city in the country.”

 

The favorable rates obtained this week come as a result of current market conditions and continued excellent general obligation bond ratings, including ‘AAA’ from Standard & Poor’s and Moody’s Investors Service, as well as ‘AA+’ from Fitch. The review of the ratings was conducted just last month in anticipation of the sale of general obligation bonds, certificates of obligation and tax notes approved by City Council in June. All three rating agencies gave the City a Stable Outlook—something San Antonio taxpayers can celebrate.

 

Rating agencies noted “very strong budgetary flexibility and liquidity, which is supported by very strong management.” San Antonio’s bond ratings are among the highest of any major city in the United States and enable the City to borrow at the lowest possible interest rates.

 

On Aug. 25, a total of $245.3 million in general improvement bonds, taxable and tax-exempt certificates of obligation, and tax notes were sold at an overall total interest cost of 1.88%. The sale included funding of $175 million which represents the fourth issuance of the voter-approved 2017 Bond Program.  The City also sold certificates of obligation and tax notes to fund projects totaling $112 million included in the capital budget.

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Author: John Quiroz (GPA)

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