On Your Mark, Get Set, G.O!

(Miami Beach, FL) Apr 16, 2019 -

The first tranche of Miami Beach General Obligation Bonds successfully hit the market today. City Manager Jimmy L. Morales and CFO John Woodruff travelled to New York City to personally oversee the bond pricing and sale process on Wall Street.

The pricing of the G.O. Bonds generated tremendous investor interest with $342 million in orders for $162 million in tax-exempt bonds. The high demand for these bonds allowed the city to reduce yields in the final pricing, and the refunding portion of the bonds provided $4.9 million in net present value savings. The final pricing of the first tranche of bonds at 3.49% is 0.76% lower than the estimated cost of 4.25%. The lower interest rate achieved represents significant savings of $28 million to Miami Beach residents in lower total payments over the 30-year life of the bonds.

“The extremely positive bond sale results demonstrate a strongly held confidence in the financial state of the City of Miami Beach — further supporting the outstanding credit ratings that the city received earlier this month from S&P (AA+) and Moody’s (Aa2), as well as our recently increased FEMA Community Rating Score (CRS) from Class 4 to Class 5,” said Mayor Dan Gelber. “This all underscores the hard work of my colleagues and city staff in our resilience-building initiatives, showcasing how Miami Beach is Rising Above the challenges it faces as a barrier island.”

The $439 million total G.O. Bond Program is set to be issued in four separate tranches every three years, with the 57 projects being implemented over a 10 to 12-year period.

This first tranche of $153 million was approved by the City Commission on March 13, 2019 and has been allocated as follows:

  • Parks, Recreational and Cultural Facilities: $87,700,000
  • Police, Fire and Public Safety: $36,900,000
  • Neighborhood and Infrastructure: $28,400,000

It’s now time for the city to get to work! The implementation phase of projects has already begun, and the first construction groundbreaking is soon to be announced.