Refinancing bonds is money-saver
Caroline County may be able to save $1.1 million if it refinances bonds from 12 years ago.
At its March 11 meeting, the county’s financial adviser presented options to the board to refinance Series 2002 bonds.
A total of $10.4 million in bonds was issued for the construction of the new General District and Juvenile & Domestic Relations Courthouse and renovations to the Community Services Center. The county has a balance of just over $8.6 million left.
Davenport & Co. put out a request for proposals in February and received proposals from two banks: Sun Trust and BB&T.
The financial adviser is recommending that the county select the proposal from BB&T for a 10-year fixed rate of 2.7 percent with 20 year amortization, which would produce $1.1 million in savings over 10 years.
The recommendation is based on several factors.
According to the financial consultants, that rate is lower than a 15-year bank rate and a stand-alone public issuance in the current market.
There are also positive options for payment.
The county can prepay on any payment date with a prepayment penalty of 1 percent or it can be non-callable for the first 10 years but pre-payable on any payment date at par thereafter.
If the Board of Supervisors does decide to refinance, it could shave a penny off the proposed real-estate tax rate increase.
The supervisors will discuss refinancing options Tuesday at their board meeting, which begins at 6 p.m. at the Community Services Center, 17202 Richmond Turnpike.
Robyn Sidersky 540/374-5413