(Washington, DC) Chief Financial Officer Natwar M. Gandhi arrived in New York City this week to promote the District of Columbias latest offering of general obligation bonds and tax revenue anticipation notes. At an investor press conference on November 9, where he was joined by City Administrator Robert C. Bobb and other city officials, Gandhi noted that recent bond rating upgrades show that the District is an attractive investment for bond purchasers.
As a result of sustained financial success, responsible management, significant cash reserves, and a strong commercial and residential housing market, the Districts ratings have reached an all time high, said Gandhi. It is this type of success that we hope will draw additional investors to the District of Columbia.
The District plans to issue $400 million of general obligation bonds to fund its fiscal year 2005 capital improvement program and $250 million in tax revenue anticipation notes to fund its fiscal year 2005 seasonal cash flow needs.
Including the fiscal year just ended in September, the District has achieved eight straight years of balanced budgets. Strong financial management initiatives, supported by Mayor Anthony A. Williams and the DC Council and implemented by the Office of the Chief Financial Officer, have contributed to these results and are the driving force behind the Districts continued positive financial outlook. The District also saw its financial performance helped by a strong real estate market, with a commercial vacancy rate of 5.7 percent in the 2nd quarter of 2004, and average home prices that have increased 18.2 percent since 2003. As a result of the Districts improved financial performance, Moodys, Standard & Poors, and Fitch Ratings have currently assigned long-term underlying ratings of "A2", "A-", and "A-," respectively, to the Districts approximately $3.4 billion in outstanding general obligation bonds.
A syndicate led by M. R. Beal & Company will offer by negotiation the Districts $170 million Series 2004A fixed rate bonds during the week of November 15, while the $80 million Series 2004B bonds will be offered the same week solely through Bear, Stearns & Co. Inc. The Series 2004A bonds will mature in June 1, 2006-2027. The Series 2004B bonds will mature in June 1, 2014-2020.
The $150 million Series 2004C auction rate bonds will be offered by negotiation the week of December 6 through Goldman, Sachs & Co. and Loop Capital Markets, LLC. The Series 2004C bonds will mature in June 1, 2007-2034.
The Districts general obligation bonds are secured by the Districts full faith and credit and taxing power, and by a direct pledge of ad valorem taxes on all taxable real property within the District.