CITY ACHIEVES MULTI-MILLION DOLLAR SAVINGS IN HISTORIC BOND SALE
(2/4/2010) NEW HAVEN- Mayor John DeStefano, Jr. and the Bond Sale Committee of the City of New Haven announced today that they successfully offered $50,400,000 of bonds in a competitive bidding process. The sale attracted 12 bidders nationwide and was achieved after the City’s credit rating was confirmed by the three national rating agencies. The list included many bidders who were bidding on the City’s bonds for the first time.
For this bond sale, the City took advantage of the new Federal program which allows the New Haven to offer a series of bonds which qualify for an interest subsidy of 35 percent from the Federal government under the Build America Bonds (BABs) Federal Stimulus Program. The interest rate payable by the City was determined for both the Series A exempt and Series B BABS. The tax exempt bonds were issued at an interest rate payable by the City of 1.75 percent and the overall rate payable by the City after application of the Federal tax credit was 3.97 percent.
Recognizing the success of this bond sale DeStefano said, “The City was able to recognize really low interest rates which is good for tax payers and is also a strong commentary on the City’s stable finances.”
“The City’s overall savings represent a historic achievement and reflect confidence in our financial condition during a challenging economic environment and a national recession,” said Lawrence Rusconi, Director of the Office of Management and Budget.
The City is estimated to have saved approximately $3.5 million through the use of the new program.
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