The Town of Westport sold $8,480,000 of General Obligation Refunding Bonds on Thursday, Nov. 19. The purpose of this bond issue was to refinance bonds originally issued in 2009 at higher interest rates with new bonds at lower interest rates, thereby saving the town’s taxpayers money, somewhat similar to an individual refinancing a mortgage.

The town negotiated the issue with Piper Jaffray & Co., an investment bank headquartered in Minneapolis, Minnesota. The bonds have a fourteen year maturity since the term has to mirror the term of the issue being refunded. The overall interest rate on the new bonds was 1.91% compared to the average interest rate of 3.88% on the old bonds. The town had been contemplating the issuance over the last few months, but given the fact that interest rates had drifted downward and remained favorable, the decision was made to price the bonds now.

“We were able enter the market when tax-exempt rates are extremely favorable,” said Matthew A. Spoerndle, Senior Managing Director of Phoenix Advisors, the town’s financial advisor. “Thankfully, we were able to lock-in a significant amount of budgetary savings for the town going forward.”

“By refinancing, the town will save nearly $590,000 over the next 13 years. The majority of the savings will be realized in the next two fiscal years to help offset the recently announced reduction in state funding to the town,” said Gary Conrad, the town’s Finance Director.

First Selectman Jim Marpe commented, “Westport is fortunate to be able to take advantage of its strong financial and economic condition for the benefit of all taxpayers. My thanks to Gary Conrad, Sheila Carey and Lynn Scully of our Finance Department for their thorough and rapid response to this significant refinancing opportunity.”

“Westport’s exceptional credit rating clearly contributed to these favorable results. Congratulations to the town for these great results!” Spoerndle added.

The settlement date for the sale is Dec. 3, 2015.

Moody’s Investors Service assigned the highest possible rating, “Aaa” to the new debt issue and affirmed its “Aaa” rating on the town’s GO bonds outstanding. The rating agency cited the town’s “sizable tax base with extremely high wealth and income indices, and a manageable debt position,” “well-managed financial operations,” and the “proactive funding of the town’s post-retirement benefits liability” among the factors influencing the town’s rating.