— The
on Monday received good news before approving the sale of $4.065 million in general obligation bonds to fund the 2025 street improvement projects.
The bonds will be issued by Northland Securities and have a term of 15 years at an interest rate of 3.81%, according to Jake Emeott of Baker Tilly, who noted that when structuring the bonds in early to mid-June, Baker Tilly was showing a true interest cost of 4.32%.
“It’s a very good sale for the city,” Emeott commented. The total principal of the bonds is $4.065 million plus interest of approximately $1.6 million for a total repayment of approximately $5.7 million.
Emeott explained the rating process the city went through to determine a rating of Aa3 for its financial strength and ability to pay debt, which was determined by Moody’s.
It serves as a supplement for investors in their “due diigence, so (they) can look and see if they want to make the investment on the city’s bonds,” Emeott said about the city’s rating. “Overall, the stronger the credit rating, the lower the interest cost.”
Moody provided the city with a list of questions, which were answered by city staff before consulting with Baker Tilly to prepare for the ratings call from Moody’s, he explained.
The call took place on June 23 and city staff discussed all the things that the city of Willmar is doing, all the positive impacts it is having and conveyed Willmar’s story to the rating agency. About a week after the call, Moody’s assigned Willmar the rating rating of Aa3.
“I just wanted to make that really clear, that Aa3 is a very respectful rating, and overall, that rating call had a lot of positive feedback from it and a lot of positive discussions with it,” Emeott said. “ … The city has a very strong financial position, and they really, really praised the regional economic center for areas around the city of Willmar and especially the health care — I know we talked about quite a bit on that call. … Moody’s was very impressed with what the city has been doing.”
