Norwich – The city has received favorable interest rates of 2.1 percent in the sale of $8.8 million in two bond packages for various city and school improvements and the expansion of Norwich Public Utilities natural gas lines.

City Manager John Salomone and Comptroller Joshua Pothier announced Wednesday that the bond sales were successful. The competitive bid for $6.3 million in tax-exempt bonds for infrastructure improvements was won by FTN Financial Capital Markets at an interest rate of 2.1 percent. A second bond sale for $2.5 million in taxable bonds to fund gas line extensions was sold to BOSC Inc., also with an interest rate of of 2.1 percent.

City officials said they were very pleased with both winning bids, which came in lower than anticipated, despite the December increase in the Fed Funds Rate by the Federal Reserve.

The city improvements include infrastructure improvements, a portion of the renovation and expansion of Kelly Middle School and demolition of derelict buildings at 77 Chestnut St. and 26 Shipping St. The second bond includes gas line extensions and funding for a downtown revolving loan and a matching grant for building code improvements.

“These projects and programs are critical to the continued resurgence of the Rose City,” Mayor Deberey Hinchey said in a press release. “They go directly to improving the quality of life for our residents and businesses. We must continue to invest in our roads and bridges. We must continue to invest in our future by giving our children state-of-the-art educational facilities. And we must continue to make Norwich the best place in eastern Connecticut to run a business, large or small. The proceeds from this sale help us do all of that.”

Salomone added that the gas line extension bond, to be paid for through natural gas revenues, is an investment in “one of our greatest assets,” Norwich Public Utilities.

“The quality of services that NPU provides has made us the envy of our peer communities and is a real selling point for families and businesses that are looking to come to Norwich,” Salomone said.

Earlier this month, the city received a favorable “AA” bond rating from Standard & Poor’s Ratings Services.