By Mason W. Canales
Killeen Daily Herald
LAMPASAS - About $543,000 in interest savings was approved by the City Council on Monday after the governing body decided to refinance several municipal loans.
A 1997 utility bond, a 1998 property tax bond and a 2006 general obligation bond were compiled into one $3.5 million loan and given an average interest rate of 3.25 percent until 2036, according to city documents from a council meeting.
Prior to the refinancing, the loans had an interest rate of about 4.5 percent.
"We are not extending or stretching it to generate artificial savings," said Jennifer Douglas to the council, noting the original bond was supposed to end the same year. Douglas is with Austin-based Specialized Public Finance, which is the city's financial adviser.
The savings were generated by placing loans together and the market value of interest rates, and by the city receiving a better financial rating from Standard and Poor's.
Standard and Poor's upgraded the city, which saved about $30,000, and because of the new rating, the city doesn't need bond insurance when taking the loan.
When the city refinanced the loan Monday, the council was hoping to receive about $350,000 in savings.
"That is just over 10 percent savings," said Douglas about the difference in the two amounts.
Austin-based SAMCO Capital Markets Inc. was the underwriter for the city's loan.
Contact Mason W. Canales at email@example.com or (254) 501-7474. Follow him on Twitter at KDHCoveEditor.