Revenue generated by the network will be used to repay the bonds that Standard & Poors has given an insured rating of AA. Broadband revenue is intended to pay the debt service on the bonds beginning in 2016. Final maturity of the bonds is in 2029.
Ten firms submitted bids to purchase the bonds. Shockey, Erley & Co. came in the low bidder, charging the city a 3.067 percent interest rate, according to the city.
The final bond structure is a par amount of $38,035,000 with a premium of $2.285 million providing the city a total of $40,320,000.
This provides $37.5 million for the project construction; $2.36 million for capitalized interest payments; $326,000 for underwriting, and $135,000 for issuance expenses.
Capitalized interest will cover the debt-service payments in 2014 and 2015. The maximum annual debt service for the bond is $3.717 million, approximately $100,000 per year less than the projections going into the sale.
Hutchinson, Shockey, Erley & Co. does not have retail sales staff, but if individuals are interested in purchasing the bonds they should contact their respective financial adviser or stockbroker. The bonds will be sold in increments of $5,000.