The City of Richmond successfully sold $333.7 million in Public Utility Revenue and Refunding Bonds, of which $150.9 million was for new money projects and $182.8 million was to refund existing debt service for interest rate savings.

The cost of funds for the city’s new money projects was approximately 3.09 percent, which is near the lowest cost of funds in several decades. In addition, the city took advantage of the low interest rate environment to refund its 2013A bond issue, which will result in the city reducing its existing debt service by $22.7 million over the next 23 years. Those savings will be spread across the city’s gas, water, and wastewater enterprise funds and will alleviate a portion of the expected future year rate increases.

The bonds were highly rated by all three national credit rating agencies: Moody’s, Standard & Poor’s and Fitch (Aa1, AA and AA, respectively). Investor interest appeared to be enhanced by the utilities credit rating upgrade the city received from Moody’s two weeks before the sale.

“The extraordinary amount of competitive demand to purchase our utility bonds, which drove down the interest costs and will ultimately benefit our customers, demonstrates the confidence that investors have in the effectiveness of our system,” said Mayor Stoney.

David Rose, Senior Vice President and Manager of Public Finance at Davenport & Company LLC, the city’s financial advisor, said, “The Moody’s upgrade and overall credit quality was significant and undoubtedly showed real momentum, as the city saved many millions compared to initial pre-pandemic planning.”

“The results of this bond sale reaffirm that the city’s utility system is well run and well respected by investors,” said Acting Chief Administrative Officer Lenora Reid