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Wednesday, March 29, 2023
FairfaxVienna scores financial windfall in recent bond sale

Vienna scores financial windfall in recent bond sale

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The Vienna town government in March will obtain $13.81 million for capital-improvement projects, following the Feb. 22 issuance of general-obligation bonds.

The Vienna Town Council in a special meeting unanimously accepted a bid from Piper Sandler & Co. to issue $12,475,000 worth of bonds at an interest rate of 2.177 percent.

The town also will receive a $1.335 million premium, which investors will pay above the bonds’ face value, said Finance Director Marion Serfass.
“We’ll get a little more capital to spend on capital projects,” she said. “Investors were willing to pay more for our bonds because our ratings were so good. We’re a safe and reliable investment.”

The town will pay off the bonds, which officials usually issue every other year, over the next 20 years using meals-tax revenues and water-and-sewer fees.


“The interest rate is even better than the town expected and illustrates the confidence investors have in the town of Vienna,” Serfass said in a statement released by the town. “The town’s AAA bond rating and sound fiscal policies help assure that confidence, and the $1.33 million premium [gives] the Town Council greater flexibility in funding bond-approved projects.”

The bond funds will finance paving projects, sidewalks, park improvements and water-and-sewer infrastructure. The town listed broad spending categories so as to be able to “do all kinds of things,” Serfass said.

Council members have earmarked $900,000 of the bond premium for paving projects identified in the town’s capital-improvement plan, and will spend the remainder on a limited variety of other initiatives, officials said.
Nine firms submitted bids to the town for the bond issuance. Town officials expect to close the agreement with Piper Sandler & Co. on March 8 and begin related capital-fund projects immediately afterward.

While the sale’s interest rate is up from the 1.86 percent (and $3.1 million premium) the town obtained from J.P. Morgan Securities in March 2020 for a $34.5 million bond sale, it still is pretty low, Council members said.

“I’d take this money and run,” said Council member Charles Anderson.

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