Finance Department

Municipal Bond Sales

Overview

The Town sells bonds to borrow money to help pay for projects such as water and sewer plants, streets, parks, fire trucks, fire stations, and other Town government buildings. Borrowing for such projects enables future taxpayers to share the cost.

General obligation bonds require voters' approval. Other debt financing options include revenue bonds, certificates of participation, installment purchase contracts, and state revolving loans.

Amount of debt

Debt payment

Ratings

Town of Cary general obligation bonds are rated AAA - the best possible - by all three national credit rating agencies. These agencies generally consider revenue bonds and certificates of participation to be higher risk since taxing power is not pledged. However, all Town of Cary debt carries high ratings because of the Town's financial strength.

Financing Type

Moody's

Standard
& Poor's

Fitch

General obligation bonds

Aaa

AAA

AAA

Revenue bonds

Aaa

AAA

AAA

Certificates of participation

Aa1

AA+

AA+


Further explanation of the significance of such ratings may be obtained from Moody’s, S&P and Fitch respectively.

Rating symbols explanation

Ratings Announcements – Moody's, Standard and Poor's, and Fitch

Pending Sales

The Town expects to sell general obligation bonds in FY 2014. Approximately $35.8 million will be sold to pay for Transportation, Parks and Fire projects approved in the November 6, 2012 bond referendum. In addition, about $60 million in 2005 authority for general obligation bonds for wastewater projects will be issued.  The Town expects to sell revenue bonds (for utility projects) in FY 2013. The Town schedules bond sales based on the estimated construction dates of projects.

The following general obligation bonds have been authorized by Cary voters, but not yet issued. Some of the following authorization has been budgeted for current projects.

Description

Date Approved

Amount

Transportation

November 6, 2012

$57,680,000

Parks & Recreation

November 6, 2012

$21,085,000

Fire   

November 6, 2012

$6,450,000

Wastewater

May 3, 2005

$85,000,000


(Total - $165,000,000)

Buying Town of Cary Bonds

The N.C. Department of State Treasurer handles Town of Cary bond sales. Most bonds are sold competitively to the investment banking firm that offers the lowest interest rate. That firm then sells the bonds to individuals and institutions such as insurance companies. Individuals can buy Cary bonds from registered broker dealers.

CUSIP Numbers

A bond's CUSIP is an alphanumeric identification code, usually nine characters, assigned to each maturity of a bond issue and is printed on the face of each individual bond. All municipal bonds are assigned a CUSIP number prior to pricing.

CUSIP numbers for bonds outstanding as of June 30, 2013.

Types of Debt

General Obligation Bonds

  • Description - Town's taxing power pledged; voter approval required
  • Town of Cary uses - Water and sewer projects, streets, parks and recreation projects

Revenue Bonds

  • Description - Specific revenue pledged; taxing power not pledged so no vote required
  • Town of Cary uses - Reclaimed water system, sewer system improvements, water tanks

Certificates of Participation

  • Description - Specific property pledged; voter approval not required
  • Town of Cary uses - Town Hall expansion, N.C. 55 widening, street improvements

Installment Purchase Contracts

  • Description - Property that is financed used as collateral
  • Town of Cary uses - Projects costing less than $10 million

State Revolving Loans

  • Description – Approved to N.C. Department of Environment and Natural Resources
  • Town of Cary uses – Sewer projects

Links

Comprehensive Annual Financial Report

Contact

Mary Beth Huber
Deputy Treasurer
Town of Cary Finance Department
P.O. Box 8005
Cary, NC 27512-8005
(919) 462-3957
marybeth.huber@townofcary.org

Karen Mills
Finance Director
Town of Cary
P.O. Box 8005
Cary, NC 27512-8005
(919) 469-4110
karen.mills@townofcary.org