By Andreas Yilma Citizen’s News
BEACON FALLS — The town’s credit rating got a boost to AA+ after its latest debt issue.
S&P Global Ratings raised the town’s credit rating from AA to AA+ due to meeting the financial services agency’s requirements at an optimal level. Town officials placed a bond anticipatory note for $4 million and bonded $ 2 million last year. The BAN was rolled into the bond this year. Of the $6 million, $1 million was for upgrades to the wastewater treatment plant and the remaining $5 million was for road improvements, according town Finance Manager Natasha Nau.
“This upgrade in the credit rating can save hundreds of thousands of dollars in interest payments on this debt issue alone,” Nau said.
The town has held an AA rating since 2016 when town officials upgraded their previous debt issue.
The town received six bids on the town’s bond sale call. FHN Financial came in with the lowest interest rate at 1.74%. It’s a 20 year issue until 2042, Nau said.
Nau said the town was judged based on management practices, economy and demographics, financial performance, debt management and long term liability.
The town’s financial adviser, Barry Bernabe of Phoenix Advisors LLC, said it’s not often towns are upgraded.
“The town saved about $100K in lower interest costs over this bond issue,” Bernabe said.
Bernabe said Beacon Falls is ranked as having a stable outlook and added he couldn’t find a lower borrowing rate the town has received in at least two decades.
“As far back as I can go, 25 years, this is the lowest borrowing cost that the town has received,” Bernabe said.
The town has been heavily focused on paving. Town officials have already spent $2 million on roads during this year. Workers haven’t been able to do any work at the wastewater treatment plant due to engineering delays. The town is poised to spend the remaining $3 million on roads in 2022, according to Nau.
Bernabe and Nau both agree the upgraded credit rating will help the town.
“It shows that the towns’ financial position is very strong,” Bernabe said. “It helps keeps taxes and debt levels low.”
“This credit rating will hold as long as we maintain all the criteria and continuing with good management practice, good financial performance,” Nau said.