Town of Palm Beach issues 2019 Public Improvement Revenue Refunding Bonds at a 10.24% debt service savings and Rating Agencies Affirm Town of Palm Beach AAA Issuer Credit Rating and provide Highest Possible Ratings on 2019 Revenue Refunding Bonds of AAA and Aa1
On December 4, 2019, the Town received eight competitive bids to advance refund a portion of the 2013 Revenue Bonds. Based on lowest true interest cost (TIC) of 2.986426%, the 2019 Bonds were awarded to Mesirow Financial, Inc. The final bid resulted in the Town achieving $4,385,248 of net present value debt service savings or 10.24% of the Refunded Bonds par amount, which exceeds the 8% parameter set by the Town Council. This equates to gross savings of $6,000,957 or approximately $260,000 annually through 2043.
The rating agencies, Standard and Poor’s (S&P) and Moody’s, who establish credit ratings to bonds assigned AAA and Aa1 ratings to the 2019 Revenue Refunding bonds respectively and reaffirmed the issuer ratings for the Town at the highest rating classification given by Moody’s and S&P: Aaa/AAA. The Aa1/AAA ratings for the Series 2019 Bonds represent the highest rating classification the rating agencies issue for Covenant to Budget and Appropriate Bonds.
According to Moody’s, the credit strengths of the Town include a large and wealthy tax base, strong financial position supported by conservative management and long-term planning.
According to S&P the ratings are based on their assessment of Palm Beach’s very strong economy with access to a broad and diverse metropolitan statistical area; very strong management, with strong financial policies and practices under their financial management assessment methodology; and strong budgetary performance, with operating surpluses in the general fund and at the total governmental fund level; very strong budgetary flexibility with an available fund balance in fiscal 2018 of 33% of operating expenditures; very strong liquidity, adequate debt and contingent liability position; and strong institutional framework score.
To view the Credit Opinion, please click this link.
To view the S&P Global Final Report, please click this link.