Refinance expected to save city $700,000

FROM STAFF REPORTS

Alabaster officials said they expect the city to save more than $700,000 after the City Council approved a refinance of a series of warrants during a March 5 meeting.

City Administrator George Henry said the warrants are still scheduled to be paid off in the same amount of time, but lower interest rates will save the city “in excess of $700,000.”

“By taking advantage of the current low interest rates in the municipal bond market, the city was able to reduce its interest rate from approximately 4.5 percent on the series 2004-B issue to approximately 2.3 percent on the new bonds,” Henry wrote in a press release. “As part of the issuance process, the bond rating firm of Moody’s Investors Service affirmed the city’s solid Aa3 rating.”

“The city continues to take advantage of opportunities to lower its borrowing costs,” Alabaster Mayor David Frings wrote in the release. “The savings realized from the refinancing opportunities our city completed in recent years are having a meaningful and positive impact on our budget, allowing us to weather the recent financial times more easily.”

The city worked with the underwriting firm of Merchant Capital and bond counsel Presley Burton and Collier, LLC on the transaction.