The city of Rochester, New York, sold $105 million in bond anticipation notes to make general improvements to the city.
The notes mature on August 1, 2024, and yield 3.4%. They pay interest at 4.5%. The securities received a rating of SP-1+ from S&P Global Ratings, while the city received a rating of AA-.
“This rating reflects the responsible fiscal management of all of our departments as we work to create a hope-filled city with a prosperous future,” Rochester Mayor Malik Evans said in a statement.
Proceeds from the sale of the notes will finance water supply facilities, local works, parking, library, war memorial, school, refuse, and general city purposes, such as street construction. About half of the proceeds will go to general city purposes, while an additional $34 million will go toward the city’s schools.
Rochester has a rocky history with bond issuances. Last year, the Securities and Exchange Commission (SEC) charged the city, its former finance director, and the chief financial officer of its school district with fraud for misleading investors as part of a $119 million bond issuance in 2019. The SEC alleged that Rochester supplied outdated financial statements for the city’s school district that did not reveal the financial distress it was experiencing. The case is ongoing.
The notes issued this week are general obligations of the city, backed by its full faith and credit and secured by property taxes.
BofA Securities Inc served as lead underwriter on the issuance.