The City of Carmel completed the refinance of two outstanding bond issues Wednesday, a move that will save the City more than $16.9 million of total interest savings.
The bonds were priced on Sept. 23 and the taxable interest rate on the Refunding Bonds was 1.99 percent, an excellent rate that reflects the City’s AA bond rating by S&P Global Corporation.
The financial team at Baker Tilly, led by Heidi Amspaugh and Loren Matthes, assisted the Carmel City Council and Carmel Redevelopment Commission with the refinancing of these two outstanding bond issues. The bonds that were refunded were originally issued to finance a portion of the Performing Arts Center complex and other redevelopment projects.
“Carmel has a strong credit rating and maintaining the AA rating during the COVID-19 pandemic is very impressive to sophisticated investors,” Matthes said. “This is directly attributable to the City’s excellent financial management, large and stable fund balances, high income levels, and TIF performance. We were able to take advantage of the bond market with historically low interest rates, and also get the bonds into the market ahead of increasing bond supply and anticipated volatility due to the upcoming elections.”
The bonds refinanced were Carmel Redevelopment Authority, $187,465,000 Taxable Lease Rental Revenue Bonds, Series 2020A and 2020B.
On an annual basis, the savings to the City will be:
- $2.2 million in 2020
- $2.7 million per year from 2021 through 2023
- $465,000 per year from 2024 through 2037
Baker Tilly’s Pricing Director, Tim Sutton, informed the City that the strength of Carmel’s credit attracted widespread bond investor interest and bids, which enabled the underwriter, Stifel, to push for lower interest rates.
Following the pricing, Tim wrote to the City officials, “Congratulations to all of you for your work and the commitment all of you make to the City of Carmel. I’m very pleased, as I hope all of you are, that the National Municipal Market has recognized Carmel as being one of the select few cities, nationwide, that these big and sophisticated investors are willing to make significant investments in.”