Bond Refinancing Saves Virginia Beach Taxpayers $4.4 Million over 11 Years

For the 10th straight year, Virginia Beach earns perfect triple-A bond rating from all three major rating agencies.

The City recently closed on $101.2 million in new general obligation bonds at a low rate of 2.26 %. The proceeds of the bonds issued by the City are used to finance capital improvement projects, such as new schools and roadways. 

The City also issued $54.9 million of refunding bonds at the even-lower rate of 1.37%. This is a process similar to refinancing a mortgage to get a lower interest rate and therefore save money. As a result, the city will save $4.4 million in debt service payments over the next 11 years. 

Rating agencies re-examine Virginia Beach’s management practices before each bond sale to make sure the City continues to be fiscally conservative. The low interest rate the city received for these bonds is, in part, the result of the City receiving the highest possible credit ratings from the three major rating agencies. 

Virginia Beach is the only city in Hampton Roads with triple-A bond ratings from all three agencies – Fitch Ratings, Moody’s Investors Service and Standard & Poor’s. The agencies affirmed the City’s triple-A rating with stable outlooks and were highly complimentary of the City’s financial management strength:

  • Moody’s Investors Service: Moody’s cites a “conservative and proactive budget management” in assigning its Aaa rating.
  • Standard & Poor’s: S&P characterizes the City’s management conditions as “very strong management,” with “strong” financial policies and practices.
  • Fitch Ratings: In the key rating drivers, Fitch describes financial management as “sound” with superior level of inherent budget flexibility.
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