Pawtucket water customers save $9.8M through R.I. Infrastructure Bank refinancing

MERRILL W. SHERMAN, board chair of the Rhode Island Infrastructure Bank, said a refinancing of bonds originally issued by the Pawtucket Water Supply Board secured lower interest rates than expected due to investor demand. / PBN FILE PHOTO/RUPERT WHITELEY
MERRILL W. SHERMAN, board chair of the Rhode Island Infrastructure Bank, said a refinancing of bonds originally issued by the Pawtucket Water Supply Board secured lower interest rates than expected due to investor demand. / PBN FILE PHOTO/RUPERT WHITELEY

PROVIDENCE – The Rhode Island Infrastructure Bank has completed a refinancing of the Pawtucket Water Supply Board’s bonds, a move that will save customers $9.8 million in future debt service.
“Rhode Island Infrastructure Bank is helping cities and towns across the state to save money and free up funds to invest in their priorities,” Merrill W. Sherman, board chair of the Rhode Island Infrastructure Bank, said in a statement. “This transaction secured lower interest rates for Pawtucket – and due to strong investor demand, lower interest rates than we originally expected. The successful sale reaffirms investors’ confidence in the financial strength of the infrastructure bank.”
The RIIB sold $24,265,000 Series 2015 Refunding Bonds to refinance outstanding bonds originally issued at higher rates in 2003.
Proceeds from the 2003 bond issue were used by the Pawtucket Water Supply Board to build the Pawtucket Water Treatment Plant.

Pawtucket Mayor Donald R. Grebien said city officials are pleased with the recent refunding results.
“Working with the Rhode Island Infrastructure Bank, the savings we achieved for ratepayers exceeded our expectations. I commend the Pawtucket Water Supply Board and the Rhode Island Infrastructure Bank on a very successful sale,” Grebien said.

The Pawtucket Water Supply Board will save more than $400,000 annually over the expected 20-year life of the issue. The average rate on the 2003 bonds was 5.28 percent, while the 2015 bonds have rates ranging from 2.91 percent to 4 percent, according to a news release about the refinancing from the Rhode Island Infrastructure Bank.
The 2015 bonds were sold by a syndicate led by T.D. Securities and insured by National Public Financial Guarantee Insurance.

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