The investment bonds that will be sold to finance the construction of a new fire station in the city of Buckley were rated A+ by Standard & Poor’s, and the bonds went to sale Tuesday pending city council’s approval of underwriting and sale.

A+ is the fifth-highest rating of the 22-tier system Standard & Poor’s uses to convey the strength of a bond to investors, and it places the fire station bonds at the top of the “upper medium grade” investment category, which is considered to offer stable returns to investors as the debtor is at a low risk of default.

“The citizens of Buckley voted to repay the bond on a fire station from their property taxes,” City Administrator Dave Schmidt said regarding the bond’s A+ rating. “That is a very strong credit pledge from an investor standpoint.”

Seattle-Northwest Securities Corporation will underwrite the $5 million bond approved by voters in April for the construction of a new city fire station along Division Street.

Bonds will be sold by the underwriter to two types of investors, according to a statement by Financial Advisor Alan Dashen: mom-and-pop retail – individual investors – and institutions.

One aspect that changed from initial expectations, as mentioned by Schmidt, was that the total bond is not being sold as a blend of tax-exempt and federally issued Build America bonds. The debt will instead be issued entirely as tax-exempt municipal bonds.

“The Build America Bond program as we know it is set to expire at the end of 2010,” Annette Sommer of SNW Securities Corp. said. “So the supply of Build America bonds has dramatically increased as municipalities try to get them before they’re gone. Taxable treasury rates have also increased, making them (more expensive for investors). So with the combination of the greater cost and more competing Build America bonds, we felt tax-exempt bonds were a better option.”

The officiation of the bond sale agreement was noted as the end of a long process, with the bond rating interviews being particularly exhaustive, Mayor Pat Johnson said. But the agreement also marked the beginning of progress being able to begin on construction of the new fire station.

“Chief (Alan Predmore), you have a fire station,” Councilman Randy Reed said.