HomeMy WebLinkAbout4.28.2020 City of Plainview Receives AA Rating
City of Plainview NEWS
901 Broadway St.
Plainview, TX 79072
April 28, 2020
City of Plainview Receives AA-
Rating from S&P Global Ratings,
Refund on Bond Obligations
The City of Plainview’s bond rating was confirmed as a
AA- Rating with a stable outlook from the S&P Global
Ratings for the proposed refunding of the outstanding
2009 General Obligations Bonds and 2010 Certificates of Obligations Bonds that
financed the recently completed Water and Sewer Projects. These bonds were issued
for the Milwee Lift Station, U.S. Highway 70 utility relocations and the two elevated
water storage tanks.
“Refunding these bonds is like refinancing your home for a lower interest rate” City
Manager Jeffrey Snyder said.
What is a S&P Global Rating?
An S&P Global Rating is a forward-looking opinion from S&P’s about the creditworthiness
of an obligor (the City) with respect to a specific financial obligation (project bond debt or
general obligation bonds), a specific class of financial obligations, or a specific financial
program (City budget).
Why is it important?
The Standard and Poor's company rates how likely debt will be repaid from the entity in
question. The highest rating is AAA – the City of Plainview’s AA- is a rating that states the
confidence that the City is in good financial shape.
How are they calculated?
The Rating assesses the potential direction of a long-term credit rating over the
intermediate term (typically six months to two years). In determining a rating outlook,
consideration is given to any changes in economic and/or fundamental business
conditions.
What does mean to a citizen?
Your City is in good financial shape – the Rating Report notes:
Strong management with good financial policies and practices
Strong budgetary performance with 6.3% operating surpluses in the general fund
and 7.6% in the total government fund
Very strong budgetary flexibility – funds available at 122% of operating
expenditures or $16.2 million
Very strong liquidity
Debt and contingent liability is weak
Strong institutional framework – scores for Texas municipalities is strong.
“Your City Council and management have worked diligently to ensure that your dollars
are well managed to provide vital services to our community,” says Mayor Wendell
Dunlap.
Recent Bond Sale Results
Specialized Public Finance, the Financial Advisor for the City, finalized the negotiated
2020 General Obligation Bond Refunding sale that resulted in reduced interest rates that
ranged from 3.0% to 3.8% on the current bond debt to an interest rate of 1.65%. This will
result in annual savings of $47,750 every year (or $482,703 over the life of the bonds).
“With the volatility in the municipal bond market, we saw an opportunity to refund some
of the current debt obligations that were callable,” says Snyder. “Fortunately, we were
able to receive a lower interest rate, which will create capacity to address future water
and sewer infrastructure needs in this community.”
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