A town of less than 15,000 people in Massachusetts issued $63.6 million in bond anticipation notes to finance infrastructure improvements.
An issuance of such a size is unusual for a town with a small population. But Nantucket, an island off the coast of Cape Cod, is no ordinary town. Located thirty miles south of the cape, it is home to some of the most expensive homes in Massachusetts (and its population swells to 50,000 people during the summer months). Last summer, a home on the island sold for more than $38 million, becoming the most expensive house ever sold in the state.
With high home values comes high property taxes, which the town government can use to secure bond issuances.
Valuations have soared postpandemic. Total assessed valuation increased by more than 50% between 2020 and 2024, reaching a high of $37.3 billion, according to the official statement accompanying the sale of the bonds. As a result, the town collected $116.5 million in tax levies in 2024, compared to $84.3 million in 2020.
However, Nantucket officials say they don’t like to bank on such rapid economic expansion. “While new growth is one of the many sources of revenue in the annual operating budget, the Town strives to limit its reliance on new growth,” the bond documents read.
The bond anticipation notes the town sold this week mature between October 2024 and July 2025. They received a rating of MIG-1 from Moody’s Investors Service.
Nantucket will use the issuance proceeds to upgrade its aviation and water infrastructure and fund affordable housing initiatives.
BofA Securities, Inc and BNY Capital Markets, LLC served as underwriters on the issuance. Hilltop Securities Inc acted as municipal advisor.