City of Winnipeg issues $200M in bonds

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This article was published 25/01/2024 (591 days ago), so information in it may no longer be current.

The City of Winnipeg has issued bonds on its long-term debt to help pay for key capital projects.

Last week, the municipal government issued $200 million in new bonds, on a 40-year term, with an annual interest rate of 4.65 per cent.

Through that process, the city sought loans from investors to cover the debt and will provide them with interest payments. The move frees up cash for the municipal government’s capital spending. Following the term, the city will pay the money back.

Coun. Jeff Browaty, council’s finance chairman, said the strategy is a normal option for the city, not a sign that financial hardships have turned out to be worse than expected.

“This is just a normal course of doing business,” said Browaty.

A city news release notes the funds are earmarked for long-term projects, such as upgrades to the South End Water Pollution Control Centre, the new North District Police Station, a renewal of the St. James Civic Centre, and the construction of the Bill and Helen Norrie Library.

“Because these are long-term pieces of infrastructure, we borrow money and pay it back. It’s sort of like (how) most people don’t go and buy a house with cash… You don’t go buy a new sewage treatment plant with cash,” said Browaty.

He said future water and sewer rates, as well as interest earned through city investments, will help cover the costs.

Mayor Scott Gillingham said investors quickly purchased all of the bonds.

“There was a lot of demand when we basically put the $200-million offer out and investors quickly snatched up the offerings… The market was strong and there’s a lot of investor confidence in the City of Winnipeg,” said Gillingham.

Browaty noted the listed projects are samples of what could be covered through the earnings, though the money could also be spent on others.

joyanne.pursaga@freepress.mb.ca

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