|
Contact: Date: July 30, 2026 Andrew Squire
PIO, City Manager’s Office
Andrew.Squire@tucsonaz.gov
(520) 306-0080
Tucson Successful in Recent Bond Sales,
Low Interest Funding Secured for Capital Projects
The City of Tucson has successfully completed two major bond offerings totaling more than $174 million, achieving strong investor demand and favorable borrowing costs that will support critical infrastructure improvements for the community.
The City sold $71.4 million in Water System Revenue Obligations on July 7, followed by $102.65 million in General Obligation Bonds on July 14. Together, the transactions generated more than $194 million in proceeds, including bond premiums, while producing borrowing costs well below long-term historical averages.
"The City of Tucson continues to be a good investment, with sustained private sector interest in our periodic debt offerings. The success of these bond sales reflects investors' confidence in the City of Tucson's financial management and long-term fiscal stability," said City Manager Tim Thomure. "These financings allow us to continue investing in essential infrastructure while securing very competitive interest rates that reduce future costs for our residents."
Strong Market Reception
Both bond offerings attracted significant investor interest, allowing the City to achieve favorable pricing despite the challenging interest rate environment.
The July 7 sale of the Water System Revenue Obligations generated $71.4 million in par value ( the fixed face value paid back at maturity) and nearly $80 million in total proceeds, including an $8.4 million premium. The bonds achieved a True Interest Cost (TIC) of 3.87%.
The following week, on July 14, the City successfully sold $102.65 million in General Obligation Bonds, with J.P. Morgan submitting the winning bid. The sale generated more than $114.4 million in proceeds, including an $11.8 million premium, while achieving a low True Interest Cost of 3.05%.
Investing in Tucson's Future
Proceeds from the Water System Revenue Obligations will finance capital improvements that strengthen Tucson Water's infrastructure, improve system reliability, and support the City's long-term water supply and delivery system. The transaction provides approximately $80 million for project funding.
The General Obligation Bond proceeds will provide approximately $114 million for projects previously authorized by Tucson voters under Proposition 407 - Parks & Connections. Proposition 407 funds investments in our parks, pools, bikeways, and trails to improve quality of life throughout the city.
Commitment to Sound Financial Management
The success of both bond sales reflects the City's continued commitment to sound fiscal management and its strong standing in the municipal bond market. Tucson maintains high investment-grade credit ratings of Aa2 from Moody's Ratings, AA from S&P Global Ratings, and AAA from Fitch Ratings for its General Obligation bonds. Tucson Water's revenue bonds are likewise supported by strong investment-grade ratings, reflecting the utility's sound financial operations, stable revenues, and prudent long-term planning.
These ratings recognize the City's healthy financial reserves, disciplined budgeting practices, diverse regional economy, and consistent track record of responsible financial management. Strong credit ratings increase investor confidence and enable the City to borrow at lower interest rates, reducing financing costs for taxpayers and utility customers over the life of the bonds.
 ###
|
