The City of Philadelphia has locked in $170 million through a bond issue with the Philadelphia Authority for Industrial Development in an ongoing effort to rejuvenate community spaces and save taxpayer dollars by refinancing existing debt. This latest round shifted nearly $43 million of previously issued bonds, ultimately carving out $3.5 million in net present value savings for the city—representing a snappy eight percent cut. As reported by the official city announcement, this financial maneuver stems from strategic placing of the bonds on September 16, designed to back the final stages of the Rebuild program which advocates for vital improvements at parks, recreation centers, and libraries.
At its core, the Rebuild program is Philadelphia’s multi-faceted endeavor to strengthen communal bonds by overhauling infrastructure that serves its children and families. Said improvements at 37 sites have been completed thus far, with another 35 poised for refurbishment, currently tangled in various stages of development. The extra funding buoyed by this bond issue will secure an additional $140 million directed at those remaining in the queue. The city’s financially savvy bidding attracted 34 investors who offered 2.4 times the interest, according to the city's narrative, which enabled Philadelphia to cinch lower interest rates and squirrel away an additional $3.2 million for project funding.
Philadelphia's Mayor Cherelle L. Parker conveyed her satisfaction, "I am pleased that the City of Philadelphia has successfully priced $170 million in bonds to fund our ongoing Rebuild program," she told the official city press release. The mayor highlighted the dual benefits of the transaction, pointing to both the city enhancements and the fiscal thriftiness, “Rebuild has improved 37 city sites where children, families and residents can recreate and play, and these additional funds will help to improve 35 more Rebuild sites. In addition, these bonds refunded existing debt and saved city taxpayers $3.5 million in the process. This is an excellent example of fiscal responsibility, and I’m proud of City Treasurer Jacqueline Dunn and the entire team that worked on this transaction.”
City Treasurer Jacqueline Dunn contributed her perspective on the sale’s outcome, noting the robust demand, “We were pleased that the strong investor demand allowed us to maximize our investment in the Rebuild program and reduce overall costs for the City,” as she relayed to the city's publication. Financial institutions that spearheaded the distribution of the bonds include Ramirez & Co. and Janney Montgomery Scott, with PFM and Acacia Financial Group acting as municipal advisors. Closing of the bonds occurred yesterday, a fact that brings the city one step closer to seeing through the completion of the Rebuild program's ambitious blueprint.
Philadelphia has earned its strongest bond ratings in more than 40 years. Moody’s rated the city’s bonds at A1, while Fitch and S&P Global gave them an A-plus. The improved ratings could lower borrowing costs for the city moving forward.
