The first tranche of the City’s General Obligation Bond program approved by voters in November went to market this week. Due to what City Manager Jimmy Morales said was “investors’ confidence in the City of Miami Beach” there was “tremendous investor interest, with $342 million in orders for $162 million in tax-exempt bonds.” Earlier this month, the City received strong ratings from Standard & Poors and Moody’s.
As a result, the City was able to reduce the yields, ending up with a “true interest cost for the new money bonds” of 3.49% for 30-year debt.
“The interest rate used during the voter education campaign to estimate the cost of the first tranche of the G.O. bonds to residents was 4.25% based on conservative estimates of market conditions at the time,” Morales wrote in a Letter to Commission. “The lower interest rate achieved represents significant savings of $28 million to our residents in lower total payments over the 30 year life of the bonds.”
“With the bond proceeds in hand after the closing date of May 2, the Administration will now focus on the implementation of projects, especially the list of Quick Win projects totaling almost $40 million over the next 12 to 14 months,” Morales wrote.
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Effective with expiration of contract in June