Guilford Sells $53M in Bonds to Help Finance High School Project

On Tuesday, August 4 the Town of Guilford sold $31 million in long-term bonds and $22.63 million in short-term bond anticipation notes through a competitive bid process.

Approximately $33.7 million of the proceeds from the sale will be used to finance the completion of the Town’s new high school, which is scheduled to open to students in September, officials said in a prepared statement.

The balance of the proceeds will be used to fund various town and education improvement projects. The Town received ten bids on the bonds and six bids on the notes, both of which were an increase compared to the sale one year ago.

The bonds were purchased by Morgan Stanley at an effective rate of 2.78%, which was lower than the rate received on its 2014 bond issue. The notes were also purchased by Morgan Stanley.

The Town attributed the increased demand and lower interest rate on the bond issue to the “AAA” bond rating it recently received from Standard & Poor’s Rating Services.

Standard & Poor’s assigned its highest long-term bond and short-term note ratings to the Town based on its assessment of “the town’s strong wealth and income levels and the diverse and dynamic local and regional economies”.

Additionally, Standard & Poor’s credited the Town’s strong management and budgetary performance, which is evident by its past six years of continued surpluses and increasing undesignated reserves, as supporting its highest rating. The rating report mentioned development projects including Guilford Commons and The Residences at 66 High Street as providing additional diversity and growth to the tax base. The bond issue was also rated “Aa2” by Moody’s Investors Service.

The Town was assisted in the transaction by Independent Bond & Investment Consultants of Madison as municipal advisor and Day Pitney LLP of Hartford as bond counsel.