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Groton - One of the major bond rating houses has upgraded Groton's bond rating, saying the local economy is "strong" and the town has "very strong cash levels" to cover debt and expenses.
Standard & Poor's Ratings Services raised its long-term rating of Groton's bonds from AA to AA+, according to a March 27 report by the agency. Two other rating agencies - Fitch Ratings and Moody's Investors Service - affirmed their ratings of AA and Aa2 in late March and also commented on the town's financial strength.
Ratings are important because investors look at them before offering an interest rate to the town. Groton, which usually hears from five bidders when borrowing money, heard from seven bidders on April 2 when it sought bonds to cover the Thames Street project and road maintenance program.
The town had estimated an interest rate of 3.14 percent on the $8.9 million bond issue and instead received a rate of 2.7 percent. The town received an interest rate of 2.1 percent on a $375,000 bond for the senior center, also lower than expected.
The improved rates will save the town $31,000 in interest payments in the coming fiscal year, Finance Director Sal Pandolfo said.