The City of Frederick conducted a bond sale for the purpose of refinancing of the City’s General Improvement Bonds, 2002 Series, and a partial refinancing of the City’s Public Improvement Bonds, 2005 Series, with a $53,415,000 bond issue on Jan.17,2013.
CONTACT: Susan Harding, Public Information Officer, 301-600-1385
FOR IMMEDIATE RELEASE: Friday, January 18, 2013
City’s Bond Rating Announced
Frederick, MD – The City of Frederick conducted a bond sale for the purpose of refinancing of the City’s General Improvement Bonds, 2002 Series, and a partial refinancing of the City’s Public Improvement Bonds, 2005 Series, with a $53,415,000 bond issue on January 17, 2013. The refinancing generated a total savings of $6,649,020 to the City with a true interest cost of 1.545025%.
In anticipation of refunding the City’s 2002 and 2005 bond issues, The City of Frederick recently requested a ratings review of the City. Moody’s Investors Service has assigned an ‘Aa2’ rating and a positive outlook to the refunding bonds and has concurrently affirmed the ‘Aa2’ rating and positive outlook on the outstanding City debt. Additionally, Standards & Poor’s Rating Services assigned its ‘AA’ long-term rating and stable outlook to the refunding bonds and affirmed its ‘AA’ long-term rating and underlying rating with a stable outlook on the City’s existing general obligation debt. Fitch Ratings has assigned a rating of ‘AA+’ to the 2013 refunding bonds and affirms their ‘AA+” rating on the City’s outstanding general obligation debt.
“A promising future is only possible through fiscal responsibility and fiscal responsibility has been a platform embraced by the 60th Administration. The favorable bond ratings were the result of the good decisions we made and the smart fiscal policies we have implemented. Favorable bond ratings will allow this and future Administrations the ability to borrow at favorable rates.” said Mayor Randy McClement.
All three rating agencies noted strong financial management as a key factor in their ratings as displayed through a strong reserve position with formal policies and conservative management in place. A strong and expanding local economy with a significant commercial and retail component was another key factor in the ratings determination. Being a part of the Washington-Baltimore regional economy, as well as the presence of Fort Detrick and its mission of biomedical research and technologies, bodes well for the City.
Additionally, all three noted the manageable debt burden of the City as a positive factor. Recent efforts by the City to address long-term pension and other post-employee benefits (OPEB) liabilities were also viewed positively.