Miami Beach bonds hit the ground running on Wall Street
The first tranche of Miami Beach General Obligation Bonds hit the market today! City Manager Jimmy Morales and CFO John Woodruff traveled to New York City to personally oversee the bond pricing and sale process on Wall Street.
The morning kicked off with a meeting at the offices of J.P. Morgan where the bonds were priced and prepared for distribution. The bonds were posted for sale for approximately three hours today as investors placed their bids. All bids were awarded and all of the bonds were sold.
The pricing of the G.O. Bonds generated tremendous investor interest, with $342 million in orders for $162 million in G.O. Bonds. The high demand for the tax-exempt bonds allowed the city to reduce yields in the final pricing at 3.49%, which is 0.76% lower than the estimated cost of 4.25%. The refunding portion of the bonds provided $4.9 million in net present value savings. The all-inclusive true interest cost for the bonds is 3.49% for 30 year debt. The lower interest rate achieved represents significant savings of $28 million to residents over the 30 year life of the bonds.
The extremely successful bond sale results demonstrate a strongly held confidence in the financial state of the City of Miami Beach – further supporting the outstanding credit ratings that the city received earlier this month from S&P (AA+) and Moody’s (Aa2), as well as its recently announced FEMA Class 5 Community Rating Score (CRS). This all underscores the hard work of city officials in its resilience-building initiatives – showcasing how Miami Beach is Rising Above the challenges it faces as a barrier island.
The $439 million total G.O. Bond Program will be issued in four separate tranches every three years, with the 57 projects being implemented over a 10 to 12-year period. This first tranche of $153 million was approved by the City Commission on March 13th and has been allocated as follows:
- Parks, Recreational and Cultural Facilities: $87,700,000
- Police, Fire and Public Safety: $36,900,000
- Neighborhood and Infrastructure: $28,400,000
Now, it is time for the city to go to work! The implementation phase of projects has already begun, and the first construction groundbreaking is soon to be announced.
Stay tuned to continue watching Your Voice, In Action!