October 13, 2010 11:24:00 AM
Our posse''s on Broadway. Or at least it was.
A small contingent from Columbus was in New York City Monday and Tuesday to speak with Moody''s Investors Service and Standard & Poor''s financial services regarding Columbus'' credit rating.
The city is currently expecting $3.8 million in bond money to be awarded before the end of 2010 for paving projects. The plan is to consolidate those funds with $5.2 million in existing debt and lock in a single interest rate and payment for all of the debt.
The interest rate hinges on the credit rating. Thus, the New York trip.
Chief Operations Officer David Armstrong explains the credit rating essentially grades the city''s likelihood to repay the borrowed money on time. That, in turn, will effect investors'' willingness to purchase Columbus'' bonds.
A rating of AAA is highest and best on the S&P scale. The last time Columbus issued bonds, in 2000, the city rated A on the S&P scale.
"They look at your solvency, fund balances, sales tax, ad valorem, new growth and building permits," said Armstrong, listing the factors weighed by the rating agencies.
He said the agencies do have formulas for determining the rating but still prefer to meet with clients in person.
"They just want to meet you eyeball-to-eyeball and get a feel for who the management is. They don''t want e-mails or phone calls. That''s just the way it''s been for a long time," said Armstrong.
The Columbus delegation included Armstrong, Mayor Robert Smith, Chief Financial Officer Mike Bernsen, Jackson bond lawyer Kelly Hardwick, and two underwriters from Morgan Keegan & Co., the company which will sell the bonds for Columbus.
Smith said the meetings were positive.
"I think everything went real well. They felt real good about it and we just told our story. From the residential and commercial (aspects), all the construction that''s going on, from an economic development standpoint and all the industry no more than 45 miles from Columbus. Our bond council and underwriters thought we did a heck of a job," said Smith.
City officials hope to have a "general idea" of what Columbus'' rating will be within two weeks.
The cost for the credit rating services as well as the trip to New York will be taken out of the bond issuance. But the officials aren''t sightseeing on city funds. Speaking over the phone from LaGuardia Airport Tuesday, Smith said the trip was 100 percent business.