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$795 million bond refinancing this morning saves the state millions, treasurer reports

Post by C.R. Roberts / The News Tribune on Sep. 15, 2010 at 12:56 pm |
September 15, 2010 12:56 pm

As some homeowners have discovered, now could be a good time to refinance a loan.

So the state discovered this morning as it conducted sales to refinance a pair of bond packages.

According to a release from the office of State Treasurer James McIntire, the sale saved state taxpayers “more than $83.1 million (in present value) compared with original financing costs. The savings obtained in today’s sales are more than 50 percent larger than any previous refinancing in state history.”

The sale ”saves nearly $15 million for this biennium and the next,” McIntire said.
Refunding “Various Purpose General Obligation Bonds” and “Motor Vehicle Fuel Tax General Obligation Bonds” issued earlier in the decade produced overall savings of 9.9 percent.

Each sale drew 8 firms in early-morning competitive bidding at the treasurer’s office, according to a release.
Wells Fargo Bank N.A. submitted the lowest bid for the $401 million general obligation bonds at a true interest cost of 3.03 percent. Banc of America Merrill Lynch bought the $394 million Motor Vehicle Fuel Tax General Obligation Refunding Bonds at a TIC of 2.87 percent.
McIntire credited the savings to both the economic climate and the state’s strong credit rating.

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