The city of Goleta has announced the successful issuance of its recently approved bonds, securing favorable financing terms that will support critical local projects.
The bond pricing, which took place Feb. 25, generated strong investor demand, demonstrating confidence in the city’s financial strength, creditworthiness, and responsible fiscal management.
Market conditions on the day of pricing were favorable, with declining consumer confidence leading investors to seek safe-haven assets such as municipal bonds.
As a result, Goleta’s Measure A Transportation Sales Tax Revenue Bonds and Lease Revenue Bonds attracted significant investor interest, achieving better-than-expected pricing outcomes, the city reports.
Proceeds from the bonds will fund community improvements, including transportation infrastructure projects such as Cathedral Oaks Crib Wall Repair and San Jose Creek Multipurpose Path, the city said.
“The successful bond sales and very strong credit rating of the city are a testament to how well-managed the city is by its governing body and staff as well as fortunate market timing,” said Wing-See Fox, municipal advisor for the Goleta.
Bond pricing highlights:
• Lease Revenue Bonds: Oversubscribed by more than four times, securing a true interest cost of 3.97% with final maturity in 2055.
• Measure A Transportation Sales Tax Revenue Bonds: Oversubscribed by more than two times, securing a true interest cost of 3.32% with final maturity in 2040.
• Total Project Proceeds: $35.7 million across both bond issuances, exceeding initial estimates.
Investor interest was further bolstered by the strong credit ratings assigned to the bonds by S&P Global Ratings on Feb. 12:
• Lease Revenue Bonds received an “AA” rating (Stable Outlook), reflecting Goleta’s strong financial management, stable economy, and solid revenue-generating capacity. This implies an Issuer Credit Rating of “AA+” signaling low credit risk and high confidence in the city’s ability to meet its debt obligations.
• Measure A Transportation Sales Tax Revenue Bonds were assigned an “A+” rating, aligning with staff expectations and consistent with similar local transportation sales tax revenue bond transactions with comparable debt service coverage.
“These strong credit ratings helped reduce borrowing costs for the city, ensuring that we are maximizing the value of every taxpayer dollar,” said Luke Rioux, city finance director. “We are proud that Goleta continues to be recognized for its sound fiscal management and strong financial position.”