PALESTINE —
After over three months of monitoring the bond market, Anderson County Judge Robert Johnston authorized the refinancing of bonds issued in 2003 and 2005 on Wednesday — a move that will save the county $677,365 in interest over the life of those bonds.
Commissioners gave the initial OK to refinance the bonds — issued for construction of the Anderson County Courthouse Annex and renovations to the county jail — during a meeting in early April.
Their decision included authorizing Johnston to approve the amount, the interest rate and price of the bonds at a minimum of 4 percent (or about $376,119) in savings within six months.
Called Texas General Obligation Refunding Bonds, the bonds create no new debt for the county, but are a method of refinancing current bond debt at a lower interest rate.
“It is like refinancing a home,” Anderson County Auditor Karin Smith explained in a phone interview. “The 2003 and 2005 bond series were combined and sold at a much lower interest rate of 1.76 percent.
“That is really awesome — better than any of us were hoping for,” Smith said about the new, lower rate. “(Wednesday) was a prime opportunity to sell.”
Reports presented to commissioners by Erik Macha of FirstSouthwest in April showed that the interest rates on the $4.5 million 2003 (courthouse annex) bond series ranging from 3.05 percent to 4 percent, while the $9.95 million in bonds issued in 2005 (county jail) had interest rates ranging from 4.5 percent to 5 percent.
Refinancing those bonds, now known as the 2012 Series, will bring “really good savings” to the county.
“This is a big thing,” Johnston said after the April meeting. “It is going to save the county a lot of money, which is good.”
The bonds maintain their original payoff date of 2023.
Mary Rainwater may be reached via e-mail at mrainwater@palestineherald.com
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