The Town of Ocean City, MD sold $25,795,000 of General Obligation Municipal Purpose Bonds on January 11 at a true interest cost of 2.8395%. Ocean City attracted national interest in the municipal market as 11 prominent underwriters competed for the bonds. The bids ranged from the low 2.8311% to 2.9748% for the bonds which mature 01/15/2022 through 01/15/2038. The bid was awarded by Mayor Rick Meehan to Citigroup Global Markets Inc. Pamela Kelly of Wye River Group, Incorporated, the Town’s financial advisor for the sale, stated that “Ocean City’s financial strength and budgetary flexibility combined with continued market demand for high quality tax-exempt Maryland paper, resulted in significant interest from municipal underwriters and an excellent outcome for the Town’s bond sale”.
Proceeds of the new bonds will finance the Phase 3 expansion of the Roland E. Powell Convention Center and construction of the public works facilities and transit centers located at 65th Street and 204 St. Louis Ave.
Prior to the sale, S&P Global Ratings assigned its ‘AA+/Stable’ rating to the bonds and affirmed its ‘AA+’ rating on the Town’s existing GO debt. The rating is based on the Town’s strong financial management policies and practices, strong budgetary performance and very strong liquidity.
Moody’s Investors Service affirmed its ‘Aa2’ rating on Ocean City’s debt. This rating reflects the Town’s healthy financial position driven by growing revenues and conservative budgeting.
Fitch Ratings assigned its ‘AA’ rating with a stable outlook to the Town’s bonds. Analyst Evette Caze reported, “The Town’s superior inherent budget flexibility in the form of strong revenue and expenditure controls, supplemented by the maintenance of solid reserves, provides a high level of financial resilience.”