Memphis, Tennessee, issued $150 million in commercial paper notes to finance public works projects ahead of a bond issuance anticipated for later this year.
The notes will mature no more than nine months from the date of the issuance. They received a rating of P-1 from Moody’s Investors Service and A-1+ from S&P Global Ratings.
The issuance comes as Memphis seeks to fortify its infrastructure against the threat of climate change.
“The City’s location in the southern United States and next to the Mississippi River increases its vulnerability to flooding and extreme heat,” according to the official statement accompanying the sale of the bonds. The documents added that the city “faces other threats due to climate change, including drought and damaging wind that could become more severe and frequent.”
Shelby County, where Memphis is located, is among the most vulnerable counties to climate change, according to the U.S. Climate Vulnerability Index, which is managed by researchers at the Environmental Defense Fund and Texas A&M University. Shelby County scored in the 97th percentile of vulnerability, according to the index, with low-income neighborhoods at heightened risk.
Proceeds from the sale of the notes will finance the same set of projects that the bonds are expected to fund. They will also finance interest payments on outstanding commercial paper notes. The city expects to refund the notes with a future bond issuance.
The notes are general obligations of the city, backed by its full faith and credit.
TD Securities (USA) LLC served as lead underwriter on the issuance.