City refinances revenue bonds to achieve substantial savings

City refinances revenue bonds to achieve substantial savings

Mayor Jim Cason signs closing documents. Seated are Diana Gomez, City of Coral Gables finance director, and Marcel Summermatter, vice president
with TD Bank. Standing is JoLinda Herring, Bond Counsel to the Sunshine State Government Financing Commission.

The City of Coral Gables recently refinanced two of its outstanding revenue bonds for substantial savings. The bonds, issued back in 2004 through the Sunshine State Government Financing Commission, held interest rates of 4.19 percent and 5.59 percent.

Due to favorable market conditions, the city negotiated new interest rates of 2.40 percent and 3.43 percent, keeping the final maturities of the existing loans the same. The interest rates were reduced significantly by approximately 43 percent and 39 percent respectively. These transactions will result in savings of more than $200,000 annually, for a total savings of $3.3 million.

“The savings we are achieving will free up funds that can be invested in our neighborhoods,” said city manager Pat Salerno.

During the past few years, the city has refinanced successfully the majority of its debt portfolio and locked in low fixed interest rates, removing almost all the variable rate debt that had dominated its portfolio. The financing closed on Feb. 28.

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