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City earns highest bond rating from 3 agencies

Highest credit rating means low interest rates, ability to spend more on improvement projects

SAN ANTONIO – For the sixth year in a row, the city of San Antonio has garnered the AAA bond rating from the three major bond rating agencies.

The city having the highest possible credit rating means low interest rates, which allows the city to spend less on interest to repay the debt and more on capital improvement projects.

According to a statement issued by the city, Moody's -- one of the bond rating agencies -- had the city on "negative outlook" last year, but revised its outlook to stable, citing "strong financial results guided by an experienced management team."

"We're being good stewards of (citizens') tax dollars, but also that the tax dollars can go further, because when we borrow money, we can spend more money on the actual projects as opposed to repaying debt," San Antonio Mayor Ivy Taylor said Thursday.

Also according to the statement, San Antonio is the only major city with a population of more than 1 million to have a AAA bond rating from any one of the major rating agencies.

"The city's credit rating affects every resident of San Antonio," City Manager Sheryl Sculley said in the statement. "Outstanding credit translates into lower total costs for the streets, drainage, libraries, parks and other projects that are important to the community. Many other cities would enjoy being in our shoes."

The city took immediate advantage of the credit rating, selling and refinancing a total of $320 million in bonds, certificates of obligations and tax notes (see table below).

TYPE AMOUNT INTEREST RATE PURPOSE
General Improvement Bonds $140,295,000 3.20% Projects in voter-approved 2012 Bond Program
General Improvement Refunding Bonds $94,215,000 2.10% Refinancing $96,435,000 of outstanding obligations, producing a net present value savings of $12.9 million

Certificates of Obligation

Tax-Exempt

$36,360,000 3.18% Projects approved in the capital budget

Certificates of Obligation

Taxable

$43,820,000 3.63% Alamodome improvements
Tax Notes $4,780,000 .86% Street improvements
TOTAL $319,470,000

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