MANKATO — Monday was the day the city of Mankato had scheduled for its annual springtime bond sale to finance millions of dollars of summer street construction projects. It didn’t happen.

“As you can imagine, there’s significant volatility in the market right now,” Deputy City Manager Alison Zelms told the City Council, all but Mayor Najwa Massad participating by telephone in response to the coronavirus outbreak.

That was actually the message a year ago, as well, when the city sold $8.6 million in bonds. On March 11, 2019, just as the city was offering its bonds to investors, stock prices were dropping fast, pulled down by plunging prices of Boeing stock following an airline crash.

The air disaster had caused the Dow Jones Industrial Average to drop 200 points to about 25,500. With spooked investors looking for safety, Mankato’s bonds were in high demand and Robert Baird and Co. offered to take them with an interest rate of 2.15% — well below the 2.82% the city had expected to be paying.

On Feb. 24 of this year, when the council set March 23 as the date for the sale of $5.9 million in bonds, the expectation was that interest rates would be similarly low. Investors were getting a little nervous about the coronavirus and the expectation was they might be looking for safer investments like municipal bonds. The number of coronavirus cases in the United States was only 14 on Feb. 24 and no Americans had died, but there was concern the disease outbreak elsewhere in the world might disrupt international supply lines for American companies. The Dow Jones, after approaching 30,000 in mid-February, had dropped below 28,000.

So it looked like Mankato might be hitting the bond market at a good time for a second straight year. The city’s bond consultant was thinking Mankato would be paying as little as 1.5% for its 2020 bonds.

“That is a record low, basically, for a 10-year bond,” Terri Heaton of Baker Tilly told the council.

By Monday morning, everything had changed from a month ago. The 14 American cases had become 43,000, COVID-19 was now a worldwide pandemic, and the Dow was on its way to a nearly 600-point drop to 18,592. Investors were desperately dumping stocks, but now they were afraid of bonds, too.

“So a lot of people have pulled out,” Heaton said, adding that most are looking to increase their liquid assets.

Baker Tilly a week ago was concerned the city might have to pay 2.5% or 2.6% interest to get a buyer for the bonds, but the market was so unpredictable by Monday that the rate could have gone even higher.

“We didn’t even like 2.5%,” Heaton said. “That’s why we pulled the sale today.”

It may still turn out well for the city because Baker Tilly has located a private investor who may purchase Mankato’s bonds and charge an interest rate of less than 1.5%.

“They’re reviewing city documents,” said Heaton, who expects an answer later this week. “So we’re very hopeful.”

The council authorized pursuing the sale to the unidentified private investor and, if that investor backs out, trying another sale in a month or two in the hopes of a more settled market. One way or the other, though, the city will probably have to sell some bonds. That’s because Mankato traditionally pays contractors with available funds in the city budget and then replenishes the budget with the following year’s bond sales, delaying interest payments. So the 2020 sale, effectively, reimburses the municipal budget for payments to contractors who did 2019 projects.

In that way, the city is in the same position as Wall Street investors.

“The reality is, we do need to have some liquidity,” Zelms said.