LEWISTON – The city got a good deal on the sale of its public improvement bonds, thanks to a good credit rating and low interest rates.

Officials were able to lock in a 3.44-percent interest rate on $12 million in general obligation bonds in Boston last Thursday.

Finance Director Dick Metivier said proceeds from that sale will pay for capital improvements for the coming year, including the $4.5 million Webber Street water tank replacement and the $1.75 million Oak Street parking garage.

“In comparison, last year’s general obligation bonds had a 4.14-percent interest rate,” Metivier said. “So we’re very happy.”

The city also sold $1.9 million in bonds to refinance the city’s 1993 bond issue.

The interest rate on those bonds was reduced from 4.75 percent to 2.42 percent – a savings of $138,724 over the next 10 years.

“All of our general bonds are for 20 years, but we have an option to recall them in the 10th year,” Metivier said. “We wanted to take advantage of those lower interest rates.”

The city has $78 million in outstanding debt with the current sales, Metivier said.

Part of its success is due to its credit rating from Moody’s Investor Services.

Moody gave Lewiston an “Aa3” rating in 2001 and the city has managed to retain it.

“Obviously, much of the interest rate we can obtain is driven by market conditions,” Metivier said. “But being able to maintain an ‘Aa3’ rating is very beneficial to us. It shows that the rating agency knows that the city is still strong financially and our liquidity is good and our tax base expanding.”

The rating represents the city’s expected ability to pay its debt, and is one of the top four given.

Metivier said councilors are scheduled to discuss the sale of next year’s general obligation bonds on Tuesday. That would involve the sale of $5.9 million in bonds in 2004.


Facebook comments