Town gets low interest rate on borrowing
The value of having an AAA bond rating, which is the town’s equivalent of a credit report score, was exemplified on April 26 when the town closed on a loan to cover capital debt from the previous fiscal year.
The town is borrowing a total of $8.6 million, in the form of municipal bond issuances, through the financial firm of Roosevelt and Croft at an interest rate of 2.3%, according to Anne Kelly-Lenz, the town’s chief financial officer.
Kelly-Lenz explained the bond closing to the Board of Selectmen during its meeting May 8 at town hall.
The next closest competitive bid for the loan amount came in at 2.5% annual interest, Kelly-Lenz said. That bid was from Citigroup.
“We saw what the best bids were for the town and chose it right there,” Kelly-Lenz said.
It took about a week for the money to appear in the town’s accounts. The money was there last Friday, Kelly-Lenz said.
A total of six lending institutions competed for the contract.
“This is for bonding for projects approved last year, so projects authorized in this year’s town meeting will be bonded next year,” Kelly-Lenz said.
An obligation rated AAA has the highest rating assigned by Standard & Poor’s Global Ratings. The town’s capacity to meet its financial commitment on the obligation is extremely strong.
The capital budget included extensive road repairs and a coconut fiber turf field for Wilton High School, as well as computer equipment and weapons for police and money toward a main communications radio.