The City of Omaha has sold $25 million in bonds to help pay for improvements to the city's streets, sewer system, parks and other facilities.
The sale of the bonds comes just after the city announced its bond rating had been downgraded by the rating agency Standard and Poor's. But Mayor Jean Stothert said Wednesday that the interest rate at which the bonds were sold proves that the drop in rating had not created a negative impact.
The 20-year bonds were sold at a rate of 3.24 percent. Last week, before the downgrade was announced, underwriters projected the city would be able to sell the bonds at a 3.23 percent interest rate, the Mayor's Office said in a statement.
Standard and Poor's dropped Omaha's rating from AAA to AA+, citing concerns over the city's underfunded pensions. Moody's, another rating agency, downgraded the city last year from AAA to AA1. It maintained the lower rating this year.
“The interest rate proves investors have confidence in our current and future financial performance,” Stothert said in a statement. “Low interest rates keep taxes lower and allow us to complete more projects.”
She said the city expects to issue more bonds early next year for its major sewer system project.