MAY 28, 2014
Scottsdale will save $7 million refinancing debt as rating agencies affirm the city’s strong credit
The city of Scottsdale stands to save more than $7 million over the next decade by taking advantage of lower interest rates on outstanding debt – rates made possible by the city’s high credit rating.
Earlier this year, all three major credit rating agencies affirmed the city’s “AAA” rating on general obligation bonds – the highest possible. Fitch Ratings cited Scottsdale’s diverse local economy and low unemployment rates, while Moody’s referenced the city’s large and diverse tax base, strong fiscal management and manageable debt levels.
“We weathered the downturn by taking the right steps to maintain our strong financial position,” said Mayor W.J. “Jim” Lane. “Now we are able to save millions by refinancing debt, to the benefit of city taxpayers.”
The effects of Scottsdale’s strong credit rating is seen in savings achieved in recent bond issues:
$83.2 million in general obligation debt at a total interest cost of 1.9 percent was issued to re-finance existing debt, saving $4.95 million over the life of the bonds
$22.74 million in municipal property corporation debt at a total interest cost of 2.5 percent was issued to re-finance existing debt, saving $2.19 million over the life of the bonds
$14 million in general obligation debt at a total interest cost of 3.2 percent was issued to finance recent land purchases in Scottsdale’s McDowell Sonoran Preserve
A majority of the savings will result in lower secondary property taxes to Scottsdale property owners, while smaller portions will benefit the city’s general fund and the McDowell Sonoran Preserve fund.