Sale of Events Center Bonds Delayed
January 23, 2012, 4:55 PM
SIOUX FALLS, SD -
The city of Sioux Falls is delaying the sale of $120 million in bonds to pay for a new events center.
The city's finance director says the delay is intentional in order to get the best deal when the bonds go to market.
"The more competition, the better from the city's stand point," Sioux Falls Finance Director Tracy Turbak said.
Turbak says Sioux Falls delayed the sale of bonds for a new events center in order to get bond ratings from Standard and Poor's and Moody's. Turbak says waiting for that double bond rating will bring more bidders to the table when it comes time to sell.
"Just like anything else, the more competition you have for something that will drive the price down and in the case where we're selling bonds that price is represented in the interest rate. So we want to drive that interest rate down as low as we can," Turbak said.
Turbak says the city can't wait too long to sell the bonds because design work is underway and those bills will start coming due. However, he says a secondary benefit of the delay is the fact that interest doesn't start accruing until the bonds go to market. That means the city could save a half million dollars over the next month to six weeks. The actual amount of savings will depend on interest rates though.
"There's no indication that they're going up anytime soon and so we're going to be very thoughtful and deliberate about the process," Turbak says.
Turbak says the delayed sale of the bonds won't delay construction, which is set to start this summer.
Both Standard & Poor's and Moody's rated Sioux Falls' bonds as being very safe, high-quality investments.
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