The City of Dubuque’s strong financial condition was affirmed by Moody’s Investor Services twice this week and general obligation bonds sold this week generated $4.5 million in interest savings for the City.
The City sold $29.5 million in tax-exempt general obligation bonds and $12.5 million in taxable general obligation bonds, receiving a 1.36% rate on the non-taxable bonds and 1.62% rate on taxable bonds.
Of the $42 million in bond revenues, nearly $37 million will be used to refund previously issued debt. The favorable rates will save the City $4.5 million in interest over the life of the current debt that is being refinanced. The remaining $5 million will fund a variety of projects.
This general obligation bond issuance follows a credit opinion report from Moody’s earlier in the week that affirmed the City of Dubuque’s credit rating of Aa3 on all outstanding general obligation bonds.
Moody’s upgraded the City of Dubuque’s Water Enterprise’s outstanding revenue bonds to A1 from A2 . The water enterprise has $28 million in long-term debt, of which $4.2 million is outstanding revenue bonds.
Moody’s said the upgrade to A1 reflects the water enterprise’s “very strong cash position, updated system condition, and strong capital and operational planning with unlimited rate setting authority.” The rating also incorporates a moderate debt burden, strong debt service coverage on senior lien parity debt which narrows but remains adequate when considering total debt service coverage.