S&P Global Assigns Simsbury its Highest Rating; Town Capitalizes on Low Interest Rates and Saves $392k on Refinancing

On February 5, 2021, S&P Global Ratings assigned its AAA rating – S&P’s highest rating – to the Town of Simsbury, with a stable outlook.  This rating was assigned as the Town prepared to refinance its State of Connecticut Clean Water Fund loan for the Simsbury Water Pollution Control Authority and issue $17.1 million in new general obligation bonds.  The rating was followed by the refunding issuance on February 17 and the general obligation issuance on February 24.

“This bond rating is an extremely positive reflection of our Town’s economic and financial strengths,” said Eric Wellman, Simsbury’s First Selectman. “In addition, I am proud that S&P specifically recognized other factors, such as the collaborative culture fostered by Town leaders and the steps we have taken to mitigate exposure to emerging risks, as positive credit factors.”

In its rating report, S&P cited the Town’s strong management team, strong economy, very strong debt and contingent liability position, very strong liquidity, rapid debt amortization, and other factors. Rob Pomeroy, Chair of the Simsbury Board of Finance said, “S&P’s report highlights our financial strengths, and reflects the work that Town staff and members of the Boards of Selectmen, Education, and Finance continue to do in order to ensure responsible fiscal management for our Town.”

The AAA rating allowed for strong investor interest during both bond sales. The winning true interest rate for the refinancing of the Clean Water Fund loan was 0.31%, and saved the Town an estimated $392,406, net of issuance costs.  The winning true interest rate for the $17.1 million new issuance was 1.26%.  This issuance will provide funding for the second half of the Henry James Middle School renovation work that has been completed, along with some additional capital projects such as road paving.

The Town’s management team – Maria Capriola, Town Manager; Amy Meriwether, Finance Director; and Melissa Appleby, Deputy Town Manager – worked with Barry Bernabe, Managing Director at Phoenix Advisors, on both the rating and the debt issuances. 

Deputy First Selectman Sean Askham, liaison to the Board of Finance, was pleased with the results.  “The report from S&P and the favorable results from both bond sales are a direct result of our strong financial policies and sound management practices.  Despite the challenges brought on by COVID-19, our local economy continues to grow, and Simsbury remains a desirable place to live, work, and do business.”