Marshalltown gets record setting low interest rate on bonds
The Marshalltown City Council authorized the issuance of $11.5 million during the regular Monday meeting.
The nearly $12 million bonds will go toward Marshalltown Regional Airport improvements and downtown street and sidewalk repair. Marshalltown is getting a record-setting low interest rate on it’s bonds in Iowa.
“For Speer Financial, they said that’s the lowest they ever had,” City Finance Director Diana Steiner said.
The city’s interest rate on $9.5 million worth of bonds will be .79 percent and 1.11 percent on $2 million worth of its bonds.
The bonds were put out for bids in July. The council has approved the bonds during each step of the way.
The council approved the bonds 6 to 1 with only Council member Al Hoop voting in opposition.
General obligation bonds are debt which is borrowed by the city with an interest rate based on the city’s bond rating. Marshalltown’s bond rating is Aa2, which it has maintained for more than five years.
The rating is considered “high-quality” on Moody’s scale. The company determines a municipal government’s credit rating, which can impact a city’s interest rate on bonds.
According to Moody’s, “The Aa2 rating reflects the city’s moderately-sized tax base with below average resident income indices and healthy finances supported by strong reserves. The city has elevated debt and pension liabilities, partially offset by rapid principal amortization.”
The individual bonded projects will still need to be approved at later dates, but the council needs to vote so the city can borrow the funds.
The COVID-19 pandemic decreased revenues for the city’s upcoming fiscal year. To compensate, the council approved a resolution to refund existing 2011-2014 bonds and save an estimated $54,900 in interest.
Contact Thomas Nelson at 641-753-6611 or firstname.lastname@example.org