The City of Macedonia recently finalized the refinancing of its Series 2010 General Obligation bonds, resulting in a savings of approximately $481,000. The Series 2020 General Obligation Refunding Bonds were issued at lower interest rates to refinance the Series 2010 Bonds which had significantly higher rates. The average interest rate for Series 2010 bonds was 4.0 percent, which was lowered to 1.23 percent in the Series 2020 bond refinancing.
“This is real savings to our taxpayers,” said City Finance Director, John M. Veres, CPA. “By working diligently to secure a lower interest rate and refinance the Series 2010 bonds, we will see savings in our annual debt service.
The City‘s strong financial profile was a significant factor in the success of the bond refinancing and associated savings.
“The Government Finance Officers Association (GFOA) Best Practices recommend that local governments consider refinancing outstanding bonds when a 3 to 5 percent net present value savings can be achieved,” said Director Veres, who led the effort during the past six months to refund the bonds and achieve these significant savings. “The City‘s net present savings for the refunding is 13.8 percent of refunded bonds – which is over four times GFOA‘s recommendation for best practices,” said Mr. Veres.
