From the Evansville Courier & Press:
StartingThursday, Evansville city authorities will essentially begin refinancing decade-old park bonds, a move expect to save taxpayers hundreds of thousands of dollars in interest payments, city officials said Wednesday.
The bonds — totaling about $15.3 million — were first issued in 2003 to cover Evansville Parks & Recreation Department projects. City Controller Russ Lloyd said the city effectively purchased all outstanding bonds and will, beginning today, reissue the bonds at a lower interest rate.
“We’re the ones who have to make those payments for principal and interest,”
Lloyd said, “so that’ll free up money that can be used for other things.”
The process is known as refunding, and as part of it, credit-rating agency Standard & Poor’s recently gave the parks department taxing district and its bonds a AA- rating with a stable outlook, citing the Evansville’s “overall strong financial position.”
An “AAA” rating is the firms’ highest.
Lloyd said the city used its power to call the 20-year parks bonds and reissue them at lower interest rates as early as possible.
The maturity date for the new bonds will still be January 2022, and underwriting firm Hilliard Lyons estimated the city would save between $745,000 and $824,000 by refunding.
The previous interest rate on the bonds was between 3.7 percent and 5 percent. Officials declined to estimate what the new rates might be in advance of today’s sale.
The $15.3 million was used primarily to fund the Amazonia exhibit at the Mesker Park Zoo & Botanical Garden, currently the zoo’s largest exhibit with a 45-feet high roof, a waterfall, a jaguar and other animals.
To repay the bond, the city established a “parks bonds” taxing district, which, like the Parks & Recreation taxing district, is countywide.
The Parks & Recreation Department manages city and county parks, pools and other complexes except Burdette Park.
The city was scheduled to pay nearly $16.7 million for the debt, but underwriters anticipate that will be about $15.8 million come 2022.
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http://www.courierpress.com/news/2012/jun/13/no-headline---ev_bonds/
