On Thursday, October 10, 2019, the Town of Branford sold $45,000,000 in long-term bonds through a competitive bid process. This sale represents the largest in the Town’s history. The bonds were purchased by Mesirow Financial Inc. at an effective interest rate of 2.31%. The Town received nine bids on the bonds, with effective rates ranging from 2.31 % to 2.63%. The bonds will mature over a twenty-year period.
In its report issued in advance of the sale, S&P Global Ratings noted the following:
- A very strong economy, with access to a broad and diverse metropolitan statistical area;
- Strong management, with good financial policies and practices under our Financial Management Assessment (MSA) methodology;
- Very strong budgetary flexibility, with an available fund balance in fiscal 2018 of 25% of operating expenditures;
- Very strong liquidity, with total government available cash at 44.3% of total governmental fund expenditures;
- Strong budgetary performance with balanced operating results in the general fund;
- Strong debt and contingent liability position, with debt service carrying charges at 6.4% of expenditures and net direct debt that is 66.5% of total governmental fund revenue, as well as low overall net debt at less than 3% of market value
The bond proceeds will be used to finance the renovations to the Walsh Intermediate School, Community House and Blackstone Library.
According to town officials, Branford’s debt is attractive to municipal bond investors because of the Town’s superior bond rating and reputation in the market.
First Selectman James B. Cosgrove emphasized, “Branford’s financial strength distinguishes Branford from other public entities. He also noted that it is refreshing that Branford’s financial health is consistently recognized by a national rating agency whose reports and analysis are utilized by investors and institutions”. “While we anticipate an increase in our debt service costs in the near term, Branford taxpayers will not see a large spike in the debt service budget due to careful and deliberate planning. “
Finance Director James Finch stated, “I am very satisfied with the rating and noted that officials strategically sought to issue more bonds than initially planned in order to take advantage of the low rate environment. This approach will take some of the guesswork out of future bonding costs and assist town leaders in developing future budgets. He also noted that Branford’s financial position is attributable to prudent budgeting, coupled with the discipline of current and past officials including but not limited to the Board of Finance and RTM in funding current and future liabilities.”
The Town was assisted in the sale by Hilltop Securities Inc. of Madison as municipal advisor and Joseph Fasi LLC of Hartford as bond counsel.