NORFOLK, VA – On April 25, the City of Norfolk sold $108.8 million in tax-exempt new money bonds that will be used to fund previously approved capital projects. With the 2023 General Obligation Bonds, Norfolk has financed a portion of the City’s previously approved Capital Improvement Program projects such as school improvements, infrastructure maintenance and sustainability, neighborhood improvements, parks and recreation infrastructure, and flooding/drainage and various storm water improvements, wastewater and waste management projects.
There was strong demand for Norfolk’s bonds, which helped reduce the borrowing’s interest rates, saving the City approximately $300,000 in interest costs compared to pre-pricing estimates. Rates are still relatively low, and the timing of the issuance provided significant savings for the benefit of the taxpayers of Norfolk. Together these led to a true interest cost for the 20-year borrowing of 3.17 percent. The transaction also included $15 million of taxable bonds with a true interest cost of 4.22 percent that provides funding for the cashflow needs of the Parking Facilities Fund.
The City earned strong market reception, receiving orders from more than 40 different investors. Of note was the enhanced diversification of investors relative to current bondholders, which demonstrates that Norfolk’s name resonates well with a variety of investors, even with the current volatility in the market.
Demonstrating the importance Norfolk places on disciplined and prudent fiscal management, this issuance provides measurable benefits to the City and is a testament to high investor confidence in the health and stability of the City. Furthermore, throughout the sale, Norfolk heard positive feedback from investors who utilized the City’s investor outreach platform, Munite.
Ahead of the sale, S&P and Moody’s reaffirmed the City’s credit strength with confirmation of the existing ratings of “AAA” by S&P and “Aa2” by Moody’s. The City’s expanding economy, commercial and residential growth, and strong financial management contributed to these ratings affirmations.