Results of Sale of General Obligation Refunding Bonds
San Francisco, CA (May 8, 2020) — On Thursday, May 7, 2020, the City finalized the sale of $195.25 million of General Obligation Refunding Bonds, Series 2020-R1 (the “Refunding Bonds”). The Refunding Bonds were issued to refinance outstanding general obligation bonds (the “Prior Bonds”) which originally funded capital projects of voter-approved bond programs such as 2008 Clean & Safe Neighborhood Parks, 2010 Earthquake Safety & Emergency Response and 2011 Road Repaving & Street Safety.
The issuance of the Refunding Bonds resulted in lower interest rates for the City’s debt which resulted in savings of $38 million over 15 years which represents $31.2 million in net present value savings which equates to 13.4% of the amount of bonds refunded.
The Refunding Bonds are rated Aaa /AAA/AA+ by Moody’s, S&P and Fitch, respectively — high ratings of creditworthiness — and were marketed and sold to investors through an underwriting team led by J.P. Morgan, with Loop Capital, Morgan Stanley, and Ramirez & Co. The City’s Refunding Bonds were well received by the market, receiving over 200 orders from more than 50 institutional investors and retail investors. The strong investor demand allowed the City to lock in a true interest cost (TIC) of 1.93% for the transaction. The final bond maturity of the Refunding Bonds is June 15, 2035.