Town Asks Moodys To Upgrade Bond Rating

By Steve Bigham

First Selectman Herb Rosenthal and Finance Director Benjamin Spragg journeyed to Wall Street Wednesday for a meeting with Moody’s Investment Services. They were there to convince the firm that Newtown deserved an upgraded bond rating.

With several large projects anticipated,  Newtown will be issuing some big bonds in the coming year. By upgrading itself from an A1 rating to a AA rating, the town would be in a much better position to borrow money.

Mr Rosenthal talked about the meeting at Wednesday’s Legislative Council meeting.

“We put it all on the table. We told them about all the potential projects and how our debt might be handled,” he said. “Moody’s seemed very pleased with our planning despite the fact that we have so many large expenditures before us.”

The town is expected to have an answer from Moody’s within two weeks.

The first selectman credited the work of Mr Spragg, who made the presentation. The town’s 18-year finance director has been before Moody’s before and knows just what they are looking for. As part of his presentation, Mr Spragg pointed to the town’s capital reserve plan and current surplus picture.

“Moody’s likes to see surplus,” Mr Spragg said.

Also, the fact that Newtown has sewers shows that it has succeeded in planning and paying for major projects. The town’s sewer fund is now self-supporting, Mr Spragg pointed out.

Mr Spragg’s presentation also discussed the town’s current tax base and the potential for further commercial development on 36 acres off Commerce Park Road and at Fairfield Hills.

 The town’s finance director said an AA bond rating would yield the town lower interest rates, and because AA towns are seen as little to no risk, the bonds that they “float” are quickly purchased on the market. Because of this, Mr Spragg said he would not need to buy insurance.

Mr Spragg said he felt the time was right for the town to request a better bond rating and feels confident the town will get its approval.

People’s Bank officials representing the town were also on hand for the one-hour meeting.