5.6. ERMUSR 03-20-2007Ji
Elk River
Municipal Utilities
13069 Orono Parkway
Elk River, MN 55330
March 14, 2007
To: Elk River Municipal Utilities Commission
Jerry Takle
Jim Tralle
Jerry Gumphrey
From: Theresa Slominski
Re: 2007 Bond Issue $2,875,000
phone: 763.441.2020
Fax: 763.441.8099
Moody's assigned a bond rating of A2 for our bond issue. (In the investment world, this a
a "Good" rating on the scale of Exceptional, Excellent, Good, and Adequate.) This
reflects our modest yet quickly growing customer base, ample coverage of historical and
projected debt service with satisfactory legal provisions, and recently increased debt ratio
that is expected to moderate going forward given the lack of additional borrowing plans.
This is the same rating as our 2006 bond issue.
The bond sale occurred on the morning of March 5`'' with 5 bidders and
Cronin/UBS/Citigroup as the low bidder at 4.0699%. The costs of issuance and fees
were lower than expected, so the construction fund will have about $40,000 more than we
previously anticipated. The closing date is set for March 28th.