Raleigh, North Carolina, issued $192.6 million in bonds to refund previously issued securities.
The bonds mature between 2024 and 2039, yielding between 2.95% and 3.18%. They pay interest at 5%. The securities received a rating of AA+ from Fitch Ratings, Aa2 from Moody’s Investors Service, and AA+ from S&P Global Ratings.
The rating reflects the city’s “historically strong operating performance,” Fitch analysts wrote. They expect that “Raleigh will continue to maintain healthy financial flexibility throughout economic cycles.”
The city will use the bond proceeds to pay down existing debt that it sold through the Walnut Creek Financing Assistance Corporation, a blended component of the city. Raleigh sold more than $160 million in bonds this way in 2005 and 2006 to finance development in the city’s downtown area.
The city will use additional issuance proceeds to refund limited obligation bonds that it sold in 2014.
The 2024 bonds are also limited obligations of the city, secured by annual appropriations. Raleigh’s general fund recorded $592.7 million in revenue last fiscal year.
BofA Securities, Inc served as lead underwriter on the issuance, purchasing the bonds for more than $211 million. The price reflected a premium of more than 19 million. DEC Associates, Inc acted as financial advisor.