S&P Global Assigns Simsbury its Highest Rating; Town Capitalizes on Record Low Interest Rates

On January 22, 2020, S&P Global Ratings reaffirmed the Town of Simsbury’s AAA bond rating – S&P’s highest rating – with stable outlook as the Town prepared to issue $9.1 million in general obligation bonds.  The rating was followed by the bond issuance on January 30, during which the Town capitalized on record low interest rates.  “This rating, and the results of the bond sale, highlight our Town’s strengths and reaffirm why Simsbury is a great place to live, work, and do business,” said Eric Wellman, Simsbury’s First Selectman. 

In its rating report, S&P cited the Town’s financial strengths, including its very strong economy, strong management, strong budgetary performance and budgetary flexibility, very strong liquidity, and rapid debt amortization. S&P noted that Simsbury obtained their highest score possible for management practices.  Rob Pomeroy, Chair of the Simsbury Board of Finance said, “S&P’s report reflects the hard work of Town staff and the commitment of our Board of Selectmen, Board of Education, and Board of Finance to responsible fiscal management.”

The AAA rating allowed for strong investor interest during the bond sale on Thursday, January 30, 2020.  The Town received a total of nine bids from underwriting firms for its $9,110,000 issuance, which will provide partial funding for renovations to Henry James Memorial School.  The winning true interest rate was 1.56% for the 15-year bond issue. The Town also received a bond premium of $1.1 million, which will help to mitigate future debt service costs.  The Town worked with Barry Bernabe, Managing Director at Phoenix Advisors, on both the rating and the debt issuance. 

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 the bond sale are a direct result of our strong financial policies and sound management practices.  I am particularly proud of our management team and our local boards for their continued focus on conservative budgeting, a commitment to funding our long-term liabilities, and maintaining responsible levels of debt.”