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 2015 Bonds
On December 8, 2015, the City's Series 2015 General Obligation General Improvement and Refunding Bonds were sold in a competitive sale to Morgan Stanley and Co. LLC. The sale raised $53.3 million to construct various projects, and $4.7 million to refund outstanding Series 2006 Economic Development Authority Revenue Bonds. The Series 2015 Bonds priced at a True Interest Cost to the City of 2.58%. The refunding generated Net Present Value savings of $562,329 or 12.03% of the refunded par amount. The Series 2015 Bonds priced favorably to bond market indices, the pricing of comparable bonds, and the City's historical bond pricing.
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 2015 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 to the Series 2015 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 December 2015 bond ratings reports from Moody's Investors Service and Standard and Poor's Ratings Services are available below.