Buffalo Comptroller Miller-Williams goes to bond market, gets interest rate of 1.66 percent on $22 million in capital borrowing

Six different bidders competed for the city’s business

In her first entry into the bond market, interim Buffalo Comptroller Barbara Miller-Williams funded $22 million in capital projects at an interest rate of 1.66 percent.

“We had six different investors competing for the city’s business, and it resulted in a very favorable rate for taxpayers, even better than we expected,” said Miller-Williams.  “Clearly, Wall Street has identified Buffalo as a wise investment.”

Instead of conventional bonds, the City issued Bond Anticipation Notes, a short-term financing option the city has used before.

“Bond Anticipation Notes give the city more flexibility, as well as helping save money on interest costs,” said Miller-Williams.  “The city receives the money to fund capital projects immediately, but we don’t have to issue the long-term bonds until after the work is complete and actual costs are finalized.”

Miller-Williams indicated that sometimes projects come in at a lower cost than initial estimates, or are shelved altogether. 

“Bond Anticipation Notes limit the city’s exposure to interest cost in these cases because we are not paying interest for the long-term,” she said.

JPMorgan Securities prevailed among the six investors bidding for the notes.  Moody’s rated the notes at MIG1, the highest possible rating for short-term borrowing, while affirming Buffalo’s long-term rating of A1.

The $22 million in funding will be spent on various capital projects including street repairs, park improvements, new vehicles for the fire department, construction of a new police shooting range, and improvements to city-owned buildings, including City Hall.