Town officials presented an overview of economic activities for a bond rating evaluation to two independent firms on Tuesday and Wednesday of this week, and will be receiving two official bond ratings today.
At $35 million, the largest bond sale in Danvers history will be taking place in two sessions, the first on June 14, and second June 29. First Southwest of Boston will be accepting written bids on behalf of Town Treasurer Joe Collins. According to Town Manager Wayne Marquis, "we might receive somewhere between three and six bids."
Marquis said the companies submitting bids are typically banks and other financial services or investment companies, but on occasion, several different entities will form a partnership for purposes of submitting a joint bid.
Because of the monetary amount, the town, in agreement with financial advisors, decided to receive ratings from two separate firms: Standard and Poor's and Moody's for the initial $25 million portion of the issuance.
The Board of Selectmen will be meeting on June 30 at 6:30 p.m. to formally vote to accept the bids and then they will sign the required documents. "We are hoping for interest rates in the 4%+/- range," he said.
Marquis said the bond rating determines how credit-worthy a town is and how likely they will be able to pay off the bonds. The bond rating Danvers receives will have an impact on the bond's interest rate. In the past, the town has received a AA+ from Standard and Poor's and an Aa2 from Moody's, with the highest rating achievable being a AAA+.
Marquis said during the conferences that officials spoke about the town's revenues, trends, and strong position. Marquis said that despite the economic recession in the country, the town remains in a good position.
"The true test of how well a community does is how well a town can weather the storm," he said, referring to the recession.
The bonds are primarily for the high school renovation project, as well as a few small components for drainage work, and the replacement of an elementary school roof.
"I left feeling we had put our best foot forward," Marquis said. "Everyone did a great job."
The town set aside a $2 million contingency for the high school renovation project, but if necessary will use short-term bond anticipation notes (BANS.
"I am hopeful when we complete the project in September of 2013 we will be able to rescind the two million dollar contingency," Marquis said.
The first $25 million bond will be sold at 7 p.m. on June 14, and the remaining $10 million will be sold on at 7 p.m. on June 29.