Bond refunding yields $6.4M in savings for Providence

PROVIDENCE MAYOR JORGE O. ELORZA said that refunding $146.3 million in bonds has saved the city $6.4 million.  / PBN FILE PHOTO/STEPHANIE ALVAREZ EWENS
PROVIDENCE MAYOR JORGE O. ELORZA said that refunding $146.3 million in bonds has saved the city $6.4 million. / PBN FILE PHOTO/STEPHANIE ALVAREZ EWENS

PROVIDENCE – The city has saved $6.4 million following a refunding of $146.3 million in bonds to take advantage of favorable market rates, Mayor Jorge O. Elorza announced Wednesday.
State legislation will allow the city to keep 80 percent of the savings from the refunding.
The savings will help the city end the current fiscal year without a budget deficit, Elorza has said.

“Refunding these bonds to take advantage of current market conditions is a clear win for stakeholders of Providence,” Elorza said in a statement. “Our taxpayers deserve to know that their hard-earned tax dollars are being used as efficiently and effectively as possible. This $6.4 million savings is an example of what we can and will continue to achieve through vigilance and strong financial management.”

The $146.3 million in Providence Public Building Authority refunding bonds were issued by the Rhode Island Health and Education Building Corp.

The interest rates achieved on the new bonds were lower than originally projected, saving the city $2.9 million in fiscal year 2015 and $3.5 million in fiscal year 2016. Originally the bonds averaged a 4.76 percent interest rate, but were replaced with a net 3.01 percent interest cost. The city did not extend the term or date of final maturity of any of the bonds, according to information from the mayor’s office.

- Advertisement -

No posts to display