Feb. 13--Moody's Investors Service and Standard & Poor's Financial Services both affirmed Germantown's AAA bond rating -- the highest possible -- Friday as the city prepares to sell $16 million worth of bonds Feb. 22.
The city intends to earmark up to $12 million for expanding Riverdale Elementary. The city will use the remainder to improve drainage at Grove Park and Cameron Brown Park, and to build an underground channel for the open ditch west of Houston High. It will also reconstruct and pave an older stretch of Wolf River Boulevard.
The city is also refinancing $5.5 million in bonds it sold in 2006 and 2009, saving $200,000 in interest over the remainder of the terms.
Germantown is one of roughly five dozen cities in the nation with a AAA bond rating.
"Moody's rated us Aaa in 1987, and Standard & Poor's upgraded their rating in 1994. We've held both since," City Administrator Patrick Lawton said. "We have held the rating longer than any community in the state. We were the first to achieve it, even before the state."
Collierville got a Aaa rating from Moody's when it sold $95 million in bonds last fall to finance a high school and improvements around the town.
Bartlett, Brentwood and Franklin also have the highest ranking from both agencies.
A high ranking allows a government entity to borrow money at a lower interest rate. In 30 years, Lawton says the top ranking has saved Germantown taxpayers millions in interest.
In this case, the savings will be substantial. The bond sale is the largest in the city's history.
The Board of Mayor and Aldermen will meet the night of the sale to approve the terms. It will also approve the interfund agreement with the Germantown Municipal School District Board of Education for the roughly $4 million it has agreed to repay.
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