Richmond, Virginia, sold $63.5 million in bonds to refund previously issued securities.
The bonds mature between 2024 and 2053, yielding between 2.38% and 4.12%. They received a rating of Aa1 from Moody’s Investors Service, AA+ from S&P Global Ratings, and AA+ from Fitch Ratings.
The rating reflects “the city’s high fundamental financial flexibility stemming from healthy reserves and broad legal control over key revenue and expenditure items,” Fitch analysts wrote.
Richmond’s finances have been bolstered by several years of prudent economic management. The city has recorded eight consecutive years of general fund surpluses, and its unrestricted general balance has doubled since 2015.
That performance has allowed Richmond to increase funding throughout its budget. Taxes, which the city has increased in recent years, make up three-quarters of the city’s general fund revenue. In the upcoming fiscal year, the city increased property taxes by 8% and sales taxes by 23%, Fitch reported. In turn, the city increased school funding by 11% and government general employee salaries by 8%.
The bond proceeds will refund a bond anticipation note Richmond issued in 2022.
The economy in Richmond, Virginia’s capital city, is anchored by the government sector, Fitch analysts wrote. The bonds are general obligations of the city, backed by its full faith and credit.
Mesirow Financial Inc served as underwriter on the issuance. Davenport & Company LLC acted as financial advisor.