Moody’s Investors Service reviewed and assigned a rating of Aa2 to the City of Loveland, Ohio, Various Purpose Limited Tax General Obligation (GO) Refunding Bonds, Series 2017. This rating affirms the Aa2 rating on the city’s outstanding GO debt. Moody’s also assigned an Aa3 rating to the Downtown Revitalization Special Obligation Revenue Bonds. The one notch difference is due to the more limited nature of pledged revenues.
The Aa2 and Aa3 ratings reflect the City’s modestly-sized and relatively stable tax base supported by ongoing population growth, healthy operating reserves, and reasonable debt burden. Credit ratings play a major role in marketing a bond issuance and the interest rate the City pays over the life of the bonds.
In conjunction with these ratings, the City refunded 2005 and 2007 bonds related to prior stormwater improvements and the purchase of real estate and saved the City $27,181 in interest expense over the life of the bonds. This is a net savings total after considering the cost of issuance. The refunding did not increase the City of Loveland’s debt burden or extend the length of the City’s debt, but merely took advantage of near historic low interest rates ranging between 1.1% and 2.625% to achieve savings.
In addition to the refunding, the City issued $550,000 in Special Obligation Revenue Bonds to permanently finance outstanding notes previously issued for property acquisition associated with the Downtown Revitalization Project. The proceeds of the previously issued notes were used to purchase .757 acres of property to be used for parking facilities. The Aa3 rating helped the City to secure a rate of 3.75% on the ten-year bond issue.
The City of Loveland was assisted in the bond rating process by RBC Capital as the bond underwriter and Dinsmore & Shohl as bond counsel, both of Cincinnati.