Virginia Beach Bond Refinancing Saves Taxpayers $8.7 Million
The City of Virginia Beach saved taxpayers $8.7 million last week by refinancing some of its bonds – loans that finance major city construction projects like school renovations and road widenings. The city’s outstanding AAA bond ratings helped make the savings possible.
This is the sixth year in a row that Virginia Beach has earned AAA bond ratings from all three major rating agencies. No other city in Hampton Roads has perfect bond ratings.
Last week, Virginia Beach refinanced $56 million in General Obligation bonds at the extraordinarily low rate of 1.98 percent. As a result, the city will save $8.7 million over the 14-year life of the loans. The city also sold $51 million in new General Obligation bonds at the low rate of 2.617 percent. That is close to the lowest interest rate ever offered for Virginia Beach city bonds. The proceeds will fund various city projects, including extending Nimmo Parkway, replacing the Lesner Bridge, building new fire stations at Town Center and Blackwater, and renovating several city and school buildings.
“To get AAA ratings from all three Wall Street agencies is a huge honor for any city,” Mayor William D. Sessoms, Jr., said. “To maintain those ratings for six years shows how seriously we take our financial responsibilities.”
City Finance Director Patricia A. Phillips added: “Our citizens are reaping the benefits of Virginia Beach’s conservative fiscal policies. Wall Street has consistently praised our debt and financing practices, and the proof is our perfect AAA bond ratings. This helps keep our city taxes as low as possible.”
All three rating agencies praised Virginia Beach’s outstanding policies:
- Fitch praised Virginia Beach’s “well-established history of strong financial management.”
- Moody’s noted Virginia Beach’s “conservative management approach, healthy financial position with improving reserves and manageable debt burden.”
- Standard and Poor’s highlighted Virginia Beach’s “very strong economy,” “strong budgetary flexibility” and “very strong debt and contingent liabilities position, driven mostly by the city’s low net direct debt.”