The City of Newport News maintains its infrastructure (buildings, streets, sewer systems, etc.) through the construction of capital s. These projects are generally too large and expensive to be paid for within the confines of the annual operating budget. To pay for such projects, the City borrows money in the bond market, known as General Obligation Bonds. General Obligation Bonds are paid back over a period of twenty years, and the annual principal and interest, also known as debt service, becomes a part of the annual operating budget. To borrow money in the bond market, the City must issue or sell bonds through a Bond Sale.
Most Recent Bond Activity – Series 2019 Bonds
On January 15, 2019, the City’s Series 2019 General Obligation General Improvement Bonds were sold in a competitive sale to R.W. Baird and Co., Inc. (R.W. Baird). The bonds have a 20-year life span, and the sale raised $92.9 million to construct various capital projects, to include public buildings, streets, school renovations, and upgrade existing park facilities. The Series 2019 priced at a True Interest Cost (TIC) to the City of 2.95%
Credit Assessments and Bond Ratings
Moody's Investor's Service and Standard & Poor's Rating Services assigned credit/bond ratings after thorough reviews of the City's economic conditions, financial statements and fiscal management policies. Formal credit/bond ratings are necessary to provide comparability and transparency so investors better understand the reasons for assigning various ratings.
Moody's Investor's Service assigned an AA1 rating to the Series 2019 Bonds and affirmed the AA1 rating on the City's previously issued General Obligation debt. AA1 is the second highest rating Moody's assigns behind AAA. Standard & Poor's Rating Services assigned an AA+ rating with a stable outlook to the Series 2019 Bonds and also affirmed their AA+ rating on previously issued General Obligation debt. AA+ is also the second highest rating Standard & Poor's assigns behind AAA.
What information is in the Bond Ratings Reports?
The January 2019 bond ratings reports from Moody's Investors Service and Standard and Poor's Ratings Services are available below.