City Of Meriden Receives High Marks On Finances

From the City of Meriden:

February 10, 2022

Meriden, CT – City officials announced exceptional results from refunding bonds that priced today. The $43.78 million refunding bond issue yielded significant savings as a result of refinancing bonds originally issued at higher rates.

“This is excellent news for the taxpayers of the City of Meriden,” said City Manager Timothy Coon, “By refinancing these bonds, we were able to take advantage of a still-low interest rate environment. The result is significant budgetary savings for our citizens.”

The City’s Chief Financial Officer Kevin McNabola indicated that as a result of the refinancing, the City will lower its interest costs by over $2.9 million, the majority being realized between the 2023 and 2025 budget years. The bonds will refinance previous ones, which were originally issued in 2014. Those bonds have reached their “call date”, or the date at which the City can refinance those bonds on a tax-exempt basis. The proceeds of those issues were originally used to fund various school, sewer and public improvement projects. Additionally, the City was able to refinance a 2011, two percent, Clean Water Fund loan with the State of Connecticut.

Raymond James was the lead underwriter on the issue with Piper Sandler acting as a co-manager in order to ensure the City received the best pricing on the issue. The resulting true interest cost was 1.85%, as compared to what the City has previously paid, on average, on the refinanced debt of 2.88%. “Interest rates are rising and have been quite volatile over the last month with inflationary concerns and expectations that the Federal Reserve is going to raise rates over this course of this year,” said Matthew Spoerndle, senior managing director of Phoenix Advisors and Meriden’s municipal advisor. “Fortunately, the City was able to enter the market now before rates move too much higher and lock in close to $3 million in taxpayer savings. This is great news for the City!”

S&P Global ratings affirmed Meriden’s rating at AA, which is two steps away from the most coveted AAA rating that the likes of Fairfield, Westport and Ridgefield possess. Within the report, S&P referenced the City’s “strong management…supported by formalized financial policies and practices” while also noting its “improved financial performance” and a “diverse employment base” as credit strengths. As a result of the rating process, the City’s “outlook” from S&P was revised from “negative” to “stable”. This was as a result of “the city's improved financial trend, including three years of audited surpluses plus an expected surplus in fiscal 2022, resulting in increased reserves and greater financial flexibility

This press release was produced by the City of Meriden. The views expressed here are the author’s own.