Pembroke Secures $35 Million in Bonds and Notes, Maintains Strong Credit Rating
Town approves sale of municipal bonds and notes with favorable interest rates, demonstrating financial stability
PEMBROKE, MA - September 18 - The Pembroke Select Board approved the sale of $35 million in bonds and notes for municipal projects during a special meeting Sept. 18. The town also maintained its AA stable outlook credit rating from Standard & Poor's.
Treasurer-Collector Kathleen McCarthy presented the bond and note sales to the Select Board, seeking authorization for the finalization and closing of the transactions.
"I'm happy to, yet again, report to you and affirm that we were a AA stable outlook, which is excellent for us," McCarthy said.
The approved sales include $16,985,000 in general obligation municipal purpose loan bonds and $18,380,000 in bond anticipation notes.
The bonds, sold to Roosevelt and Cross, Inc., carry an interest rate of 2.940057% over a 20-year term, maturing on Aug. 1, 2044. McCarthy reported that the town received 10 bids for the bonds, with interest rates ranging from 2.940057% to 3.033652%.
"This is also inclusive of the premium that covers closing costs, as well as some paydowns on some of the smaller issuance," McCarthy explained.
The bond anticipation notes, sold to Jefferies LLC, have a 2.8618% interest rate for a one-year term, maturing on Sept. 26, 2025. The town received five bids for the notes, with total interest costs ranging from 2.8618% to 3.3126%.
McCarthy noted that the note sale includes a premium of $208,613, which will cover issuance costs.
The Treasurer-Collector emphasized the difference between the two financial instruments. "Any money that we intend to spend, but not spend fully or might not have the project finished in time, we short-term it until all of the money has been expended and the project is done. That's called a BAN," she explained. "And a bond, which is a permanent financing over a particular amount of time, a “term” it's called."
The Select Board unanimously approved the sale of both the bonds and notes, along with several related measures. These include authorizing the town treasurer and Select Board to execute continuing disclosure undertakings, establish post-issuance federal tax compliance procedures, and take necessary actions to carry out the provisions of the vote.
The maintenance of Pembroke's AA stable outlook credit rating from Standard & Poor's reflects the town's strong financial position. This rating may lead to lower borrowing costs for future projects and demonstrates the town's fiscal responsibility to potential investors.