Norfolk Successfully Auctions $56.66M in Bonds

NORFOLK, Va. – On Sept. 22, the City of Norfolk successfully sold $56,660,000 of Water Revenue Bonds on a competitive basis using the Grant Street Group’s MuniAuction platform. These bonds, together with below-market federally subsidized loans and pay-as-you-go capital, form a cornerstone of the City’s strategy to secure low-cost funding for essential water infrastructure improvements, as outlined in the Water Utility Fund’s capital improvement plan.

Proceeds from the bond sale will support upgrades to the System’s water treatment plants, modernization of pipeline infrastructure, improvements to resource and delivery systems, and the installation of new water storage tanks. These strategic investments reinforce the City’s ongoing commitment to delivering reliable and cost-effective water service for the community and the region.

The bonds were purchased by J.P. Morgan Securities LLC, who submitted the winning bid with a true interest cost of 4.36 percent. The pricing outcome reflects the strong financial management by the City and the attractiveness of the credit.

During the auction, 13 competing banks – or underwriters – submitted 34 bids for the City’s bonds. Leveraging an open auction process, each underwriter instantly learned their ranking with every bid, allowing them to either maintain or improve their offer by lowering their True Interest Cost (TIC) to secure the Bonds. Strong demand prompted three extensions of the bidding period, ensuring maximum competition and value.

The City was the first in Virginia to utilize this open auction process in 2019, which has grown in popularity. Today, this enhanced competitive process resulted in the City achieving a lower borrowing cost. Between the initial bid submitted for the bonds and the final bid submitted by J.P. Morgan Securities LLC, the City’s total debt service cost decreased by over $147,000.

The City consistently demonstrates prudent fiscal management and responsible stewardship of taxpayer and ratepayer funds, guided by disciplined investment policies and robust internal controls. The City’s team thoughtfully executed a successful bond sale, enabling strategic investment in the water system’s infrastructure. The robust participation from bidders highlights the high desirability of our bonds in the municipal market — a direct testament to the City’s financial leadership and the strength of strong bond ratings.

Prior to the bond sale, Moody’s Ratings elevated the City’s Water Utility System credit rating to Aa1 (stable), recognizing the System’s robust financial management and operational reliability. S&P Global Ratings and Fitch Ratings also reaffirmed their AA+ and AAA ratings for the Water Revenue Bonds, with AAA representing the highest possible rating. These strong ratings enable the System to secure the lowest possible cost of funds, as evidenced by today’s successful outcome.

Norfolk Successfully Auctions $56.66M in Bonds

Comments