Denver pocketed more than $60 million in net savings in its latest municipal bond issuance, a reserve reflective of the city’s strong credit standings among Moody’s, Standard & Poor’s and Fitch Ratings. 

The city’s AAA ratings were reaffirmed by all three credit rating giants in November, despite the economic toll of the coronavirus, which has set the city back $220 million in revenue this year and $190 million in 2021. The scores indicate the city’s creditworthiness and serve as a signal to investors of the likelihood that debt will be repaid on time and completely for many of Denver’s major capital improvement projects. They also impact interest rates the city pays for the bonds it issues. 

Mayor Michael Hancock’s administration recently accelerated the city’s bond issuance efforts to stimulate the economy, a move secured on Nov. 2 with Denver City Council’s approval to issue $170 million worth of bonds  – the city’s fourth and largest issuance yet for city-led projects, and more than double the originally planned issuance – through the Elevate Denver Bond program.

Officials in Denver’s Department of Finance expect the program to create more than 1,800 jobs, generate upwards of $130 million in labor income and make a $3.8 billion impact on the region. 

“As we learned from the Great Recession, economic recovery requires a focused, proactive strategy to preserve fiscal strength and stimulate the local economy,” Mayor Michael Hancock said in a statement Thursday. “General Obligation bonds accomplish those goals through investment in infrastructure, neighborhoods, our workforce and small businesses. These record-high interest cost savings for the city are the direct result of our responsible financial management practices.”

“Higher bond ratings mean we pay less interest when we go to market,” said Brendan Hanlon, Denver’s chief financial officer. “Our AAA/Aaa/AAA ratings positioned the City for a successful issuance. The City combined a refunding with a new issuance for additional cost savings. We consistently monitor all debt obligations to take advantage of these kind of saving opportunities.”

The bond pricing last month showed a “strong demand from the market,” according to the city’s finance department. The Elevate Denver fourth issuance locked in a 1.75% all-in total interest cost.

With the fourth issuance wrapped up, Elevate Denver has drawn down on more than 60% of the nearly billion-dollar program. 

The majority of the $170 million will be allocated towards construction and construction-related activities, driving shovels into the ground for dozens of projects, including: $23.7 million toward design and construction of 56th Avenue from Peoria St. to Pena Blvd; $4.4 million toward design and construction of pedestrian connectivity improvement in the Globeville Elyria-Swansea neighborhoods; $10.5 million toward building out the citywide bike network $23 million toward the construction of the Central Library renovation; and $14.1 million toward construction of the Green Valley Ranch Recreation Center indoor pool.

City officials estimate that every $1 million the city pumps into capital improvements generates $2 million in economic output.

The Elevate Denver Bond Program is a 10-year, $937 million bond that was approved by voters in 2017. The goal of the program, which includes more than 500 projects, is to “enhance” the city by providing “critical” public improvements across Denver’s 78 neighborhoods. 

Over the next three years, the fourth issuance of Elevate Denver and the city’s Capital Improvement Program, will invest a combined $478 million into neighborhood improvements.