The City of Sapulpa’s second drawdown of General Obligation Bonds in the amount of $5,750,000 were sold the morning of Monday, May 3rd.
At Monday’s City Council meeting that evening, the City’s bond legal counsel, John Weidman of Hilborne and Weidman, and municipal financial advisor, Rick Smith of Municipal Finance Services, were in attendance to report details of the sale.
Smith explained that two bids were received—BOK Financial Securities offered a 25-year term at 1.72% and The Baker Group of Oklahoma City offered a 25-year term at 1.65%. The latter was awarded.
As recently as last year, when the first drawdown sold $13M in GO Bonds, “you had 4 bidders with a 25-year term, and the lowest rate was 2.5%,” Smith reported. “This gives you an indication of how much rates have gone down and how pleased we were to capture [the 1.65%] rate.”
Smith also told the Council that many municipal bond underwriters and brokers have $10M limits and that that could account for why there were only 2 bidders on Monday.
“We were able to maintain S&P’s strong credit rating of A+,” said Smith. Councilor Hugo Naifeh asked if the “A1 (or A+) bond rating had an effect on the low rate.” Smith said, “Yes, that’s a very strong rating for a community of Sapulpa’s size.” “Even with the 25-year term?” asked Naifeh? “Yes,” said Smith.
The Council unanimously approved the issuance of the bonds at 1.65% on a 25-year term to The Baker Group. Weidman said that the transaction will close on June 16th.
The City has now issued $20,750,000 of the $40,235,000 2020 GO Bond and has a little less than half remaining.
