Politics & Government

Alpharetta's AAA Bond Rating Saves Taxpayers Big Bucks

An interest rate below 3 percent on the $29 million bond issue for the City Center is the lowest the city's finance director has ever seen in 19 years working with bonds.

Alpharetta's AAA bond rating will save the city a bundle of money with the deal it made for its $29 million bond issue intended to fund the City Center infrastructure.

Finance Director Tom Harris said the effective interest rate on the bonds is 2.977 percent.

Councilman DC Aiken said that lower interest rate will save the city approximately $180,000 a year from what it had budgeted in paying back the bonds.

Find out what's happening in Alpharetta-Miltonwith free, real-time updates from Patch.

"We expected today to be a really good day in the market," Harris said during the March 5 City Council meeting at . "It turned out to be a great day. I think investors were really hungry for high quality investment debt."

He said that Alpharetta's bond deal was the only one carrying a AAA rating on Monday.

Find out what's happening in Alpharetta-Miltonwith free, real-time updates from Patch.

Harris said he's been involved in bond deals for 19 years, and this is the lowest rate he's ever seen, something the city's bond counsel confirmed was the same for them.

Councilman Chris Owens said the city budgeted approximately 18-20 percent more than what will be needed for the bond issue, not expecting to get lower than a 3 percent interest rate charged. He said that could mean additional purchasing power for other capital projects, reinvestment into the City Center or the city could pay the debt more quickly.

Bank of America/Merrill Lynch was the winner out of nine bids.

Moody's and Standard & Poors both reaffirmed the city's long-standing AAA rating leading up to the bond deal.

Moody's said the city's conservative management practices and strong financial position and low debt burden allowed the city to keep its high rating.

Standard & Poors had a longer list of positives:

  • Diverse employment base with access to the Greater Atlanta Metropolitan Statistical Area;
  • Very strong median household effective buying economy;
  • Very diverse tax base;
  • Historical trend of significant tax base growth;
  • Extremely strong per capita market value;
  • Very strong overall financial performance & reserves throughout the recent economic downturn, and;
  • Good financial policies and practices.


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