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Nov. 3 (Bloomberg) -- Minneapolis, Minnesota’s largest city, plans to sell $90 million of AAA rated general-obligation bonds as soon as next week through competitive bids.
Moody’s Investors Service, Standard & Poor’s and Fitch Ratings all gave the tax-exempt debt their top rating, according to company releases. The city is a Midwest economic center that benefits from government, education and health-care jobs, Moody’s said.
About $8.5 million of the bonds will finance yearly road- improvement projects, said Jack Qvale, secretary to the Board of Estimate and Taxation. Remaining proceeds will refund library bonds and convention-center debt to convert them from variable- rate debt to fixed-rate.
“You’ll typically see a Minneapolis AAA sell better than another city’s AAA,” said Paul Donna, senior vice president of public finance at Northland Securities Inc., Minneapolis’s financial adviser since 2004. “The market has seen rates trending down these last few days. Hopefully this trend holds.”
Yields on top-rated municipal bonds due in 10 years fell 8 basis points in the past week to 2.33 percent, according to data compiled by Bloomberg. A basis point is 0.01 percentage point.
Minneapolis sold top-rated bonds in May, with debt due in December 2015 priced to yield 1.21 percent. That compared with the 1.35 percent average rate for AAA rated five-year debt on the day of the sale, according to data compiled by Bloomberg.
Minneapolis has a population of about 383,000 and its seven-county metropolitan area contains almost 3 million residents, Census Bureau data show. The city’s unemployment rate was 7.1 percent in August, two percentage points less than the national average, according to state-compiled figures cited in the bond sale’s preliminary official statement.
--Editors: Jerry Hart, Mark Tannenbaum
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