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<br /> <br /> <br /> <br /> <br /> <br /> <br />Office of the Mayor <br /> <br />NEWS RELEASE <br />February 24, 2010 <br />2 p.m. <br /> <br />South Bend’s bond rating rises to AA-, saves $1 million <br /> <br />Contact: <br />Mikki Dobski, Director of Communications & Special Projects, 235-5855 or 876-1564 <br /> <br />or City Controller Gregg Zientara, 235-9216 <br /> <br />The City of South Bend today closed on the transaction refinancing a 2001 bond, which <br />financed construction of the Street Department garage. The action enabled the City to <br />achieve two significant benefits for South Bend taxpayers. <br /> <br />First, the Standard & Poor’s bond rating service upgraded the City’s bond rating to AA- <br />from A+. The rating upgrade was based on several credit-related factors, including strong <br />debt service coverage, sufficient reserve balances and South Bend’s diverse local <br />economy, which serves as a regional trade and service center. <br /> <br />Second, the improved bond rating, coupled with a more favorable debt financing market <br />compared with the original issue date, has resulted in a lower cost to borrow. This move <br />will save South Bend taxpayers more than $1 million over the next decade. <br /> <br />“The financial stewardship under the direction of Mayor Steve Luecke, together with the <br />financial policies practiced by the City over the last several years, have placed the City in <br />a strong financial position, which has led directly to the improved bond rating,” said City <br />Controller Gregg Zientara. “The AA- rating is a reflection of the City’s creditworthiness <br />as well as strong management practices that have led to improved financial performance <br />and position.” <br /> <br />The rating upgrade came as the City of South Bend refinanced a 2001 bond on the Street <br />Department garage to take advantage of lower interest rates. The bond is backed by <br />county option income taxes (COIT). The City previously received an A+ rating when <br />seeking to refinance the same bonds in 2009, but the rating was withdrawn because the <br />bonds were not sold. <br /> <br />The AA- rating on the bond, anticipated to be paid off in 2021, will save the city <br />$1,060,975 in reduced interest costs over the remaining life of the debt. <br /> <br />Standard & Poor’s also gave AA- ratings to bonds recently sold or refinanced in other <br />Indiana cities – including Bloomington, Carmel, Evansville and Fort Wayne. <br />- 30 - <br />