The City and County of Denver will sell approximately $120 million in General Obligation Bonds on June 10.
The Series 2009A-B General Obligation Bonds carry ratings of AAA, Aa1 and AA+ from Standard & Poor’s, Moody’s and Fitch rating agencies respectively. The bonds will be sold by RBC Capital Markets, Wachovia Securities, Robert W. Baird and Estrada Hinojosa & Co. Investors wishing to learn more about the bond sale should talk to a representative at one of these firms.
“The City’s high credit ratings provide us with strong access to the market and should garner low interest rates on the bond sale. It is especially important in these challenging economic times that our finance team continues to focus on prudent financial management that emphasizes the safety of investing in Denver,” said Claude Pumilia, the City’s chief financial officer.
The Series 2009A Bond proceeds will be used to provide new funding for the Better Denver program, the City’s $550 million infrastructure improvement program authorized by Denver voters in November 2007. The overall program funds refurbishments and new construction of streets, parks, libraries, recreation centers, and human service, public safety and cultural facilities. Bond proceeds will also be used to reimburse draws on the Better Denver Commercial Paper program.
Commercial Paper notes are short-term IOUs and have provided interim funding for Better Denver projects that were “shovel ready” and also allowed the City to borrow money in smaller denominations than a traditional bond deal. The City estimates it has saved approximately $2 million using commercial paper as a short-term funding vehicle instead of issuing long-term bonds at the outset of the program. The City will continue to utilize the Better Denver Commercial Paper program for draws with reimbursement coming through future general obligation bond issues.
The Series 2009A Bonds will also be used to fund the new Asian Tropics exhibit at the Denver Zoo. The Asian Tropics project will occupy 10 acres on the Zoo’s southern edge and will include new exhibits and state-of-the-art facilities for Asian animals such as the elephants and rhinos. Denver voters authorized a variety of improvements at the Zoo in 1999 which have been implemented over the past 10 years. The current bond issue will be the final series of bonds related to the 1999 authorization.
The Series 2009B Bonds will refund bonds issued in 2000 to finance projects at the Denver Art Museum and Denver Zoo. The refunding is being undertaken to reduce interest costs to Denver taxpayers due to the decline in current interest rates. The City expects to save approximately $775,000 with the 2009B refunding bonds.
Margaret Danuser, Debt Administrator
Michele Majeune, Better Denver