S&P Global recently upgraded Peninsula Metropolitan Park District’s (PenMet Parks’) credit rating from “AA-” to “AA”. The rating upgrade helped to secure a favorable interest rate for the $16 million Limited Tax General Obligation Bonds that will fund a portion of the costs for the initial phase of the future Community Recreation Center. The project will provide indoor recreation opportunities including a turf field, multi-purpose courts, a walk/jog track, and community spaces. The Cushman Trail will be extended through the property, which is located on the site of the former driving range adjacent to Highway 16, as part of the project. PenMet Parks anticipates using an additional $10 million from reserves funds, a community-wide fundraising campaign goal of just over $3 million, and grants, to complete the project financing.
“The District’s Bond rating has been upgraded from AA- to AA. This is a great accomplishment for the District and its citizens!” said Park Board President Amanda Babich. “The AA rating reflects that the District is well-managed and has strong financial policies and practices in place for the benefit of our citizens. The higher the rating, then the lower the interest cost.”
As part of the bond financing process, PenMet Parks staff and Commissioners, accompanied by Bond Underwriter Jim Nelson of D.A. Davidson & Co., presented information, and answered questions detailing topics of management, finances, economic growth, long-term planning, and the Community Recreation Center to the national rating agency of S&P Global Ratings.
According to Executive Director Ally Bujacich, “The upgrade to a AA rating is based on the following key factors: 1. Demonstrated track record of strong financial reserves; 2. Strength of the local economy; 3. Financial management policies and practices; and 4. Experienced management in efficiently operating the District.”
The Limited Tax General Obligation Bonds were priced on April 8th in Seattle at the offices of D.A. Davidson & Co., serving as Bond Underwriter. The 30-year Bond financing achieved an All-In True Interest Cost of 2.57%.
Park Board Clerk Kurt Grimmer noted “The District looked at various bond structures to achieve a lower borrowing cost and lower annual payment. The District selected a bond structure with a bank-qualified tax-exempt bond series with a taxable bond series. Based on market conditions, our Bond Underwriter estimated this bond structure lowered our annual payment by approximately $30,000 per year. We also lowered our annual payment as a result of the rating upgrade.”
For more information on the S&P Global rating upgrade, please email [email protected].