Denver locked in more than $60 million of net present value savings when it closed on Series 2020A-B General Obligation Bonds, which coupled a strategic refunding to secure a lower interest rate on outstanding Better Denver Bonds with a $170 million fourth issuance of the Elevate Denver Bond Program.
“As we learned from the Great Recession, economic recovery requires a focused, proactive strategy to preserve fiscal strength and stimulate the local economy. General Obligation bonds accomplish those goals through investment in infrastructure, neighborhoods, our workforce, and small businesses,” Mayor Michael B. Hancock said. “These record-high interest cost savings for the city are the direct result of our responsible financial management practices.”
Despite the nation’s turbulent economic situation, Denver’s strong financial management was recognized by the three primary bond rating agencies this past November, and its AAA/Aaa/AAA General Obligation bond ratings were reaffirmed.
“Higher bond ratings mean we pay less interest when we go to market,” said Chief Financial Officer Brendan Hanlon. Our AAA/Aaa/AAA ratings positioned the City for a successful issuance. The City combined a refunding with a new issuance for additional cost savings. We consistently monitor all debt obligations to take advantage of these kinds of saving opportunities.”
The bond pricing last month showed a strong demand from the market, and the Better Denver refunding secured an all-in total interest cost of 0.64% while the Elevate Denver fourth issuance locked in a 1.75% all-in total interest cost.
After evaluating the municipal bond market over the spring and summer, Mayor Michael B. Hancock requested to accelerate the $937 million Elevate Denver Bond Program with a fourth debt issuance that was more than double the originally planned amount. An economic model of the $170 million fourth issuance forecasts a $3.8 billion impact on the regional economy, including direct effects to jobs and businesses, as well as indirect and induced effects down the supply chain.
With the fourth issuance now complete, Elevate Denver has issued more than half a billion dollars, or 60%, of the program residents voted in during the 2017 election. The City’s general obligation bonds are tax-exempt and each voter-authorized bond program is issued within ten years. Now hitting its stride, Elevate Denver’s fourth issuance funnels the majority of the $170 million towards construction and construction-related activities, driving shovels into the ground for dozens of projects, including:
- $23.7 million toward design and construction of 56th Avenue from Peoria St. to Pena Blvd.
- $4.4 million toward design and construction of pedestrian connectivity improvement in Globeville Elyria-Swansea neighborhoods
- $10.5 million toward building out the citywide bike network
- $23 million toward the construction of the Central Library renovation
- $14.1 million toward the construction of the Green Valley Ranch Recreation Center indoor pool