For Immediate Release April 15, 2014
Media Contact: Jim Golden, Finance Director, 303-651-8629, email@example.com
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Bond Sale Underway for Longmont Broadband Project
April 15, 2014 - On April 8 the City of Longmont held the public sale of the Electric & Broadband Enterprise revenue bonds to fund the construction of the city-wide fiber optic broadband network. The bonds insured rating is “AA” by Standard & Poors.
Ten firms submitted bids to purchase the bonds. The range of bids received included interest rates from 3.410% to 3.067%. The low bidder was Hutchinson, Shockey, Erley & Co of Chicago.
Due to the favorable interest rate, the maximum annual debt service for the bond is $3.717 million which is approximately $100,000 per year less than the projections going into the sale.
The final bond structure is a par amount of $38,035,000 with a premium of $2.285 million providing the City a total of $40,320,000. This provides $37.5 million for the project construction; $2.36 million for capitalized interest payments; $326,000 for underwriting, and $135,000 for issuance expenses. Capitalized interest will cover the debt service payments in 2014 and 2015. Broadband revenues are intended to pay the debt service on the bonds beginning in 2016. Final maturity of the bonds is in 2029.
Hutchinson, Shockey, Erley & Co. does not have retail sales staff but if individuals are interested in purchasing the bonds they should contact their respective financial advisor or stockbroker. Bonds are sold in denominations of $5,000 or multiples thereof.
About LPC: Longmont Power & Communications is a community-owned, non-profit electric and broadband utility that operates under the direction of Longmont City Council. More information on LPC and its broadband services can be found at: http://www.ci.longmont.co.us/lpc/