Minneapolis, Minnesota, sold $115 million in bonds to make various capital improvements.
The bonds mature between 2023 and 2042, yielding between 3% and 4.12%. They received a rating of AAA from Fitch Ratings and AAA from S&P Global Ratings.
The rating, which marked an upgrade from Fitch, incorporates “the city’s strong revenue growth prospects driven by an expanding population and income levels, broad independent revenue-raising ability, and solid budgetary management that has resulted in healthy reserves and considerable gap-closing capacity,” Fitch analysts wrote.
The issuance comes amid a citywide push to reduce long-term debt. In June, Minneapolis used a revenue surplus to pay off the bonds used to build U.S. Bank Stadium, the home of the NFL’s Minnesota Vikings. Still, the issuance will add about $200 million to Minneapolis’ outstanding debt, according to the official statement accompanying the sale of the bonds.
The largest disbursement of bond proceeds, about $46 million, will fund improvements to the city’s water and sewer systems. Other large disbursements will be directed toward paving projects and parks improvements.
Minneapolis is the biggest city in Minnesota. The bonds are general obligations of the city, backed by its full faith and credit. The city forecasts $1.7 billion in revenue this year from a variety of sources.
Citigroup Global Markets Inc served as underwriter on the issuance, purchasing the bonds for $123 million. The price reflected a premium of $8 million.