County Saves $3 Million After Lowered Interest Rate on Bond Debt
Deal finalized Tuesday, freeholder says
Favorable interest rates nationwide, coupled with the county’s upgraded bond rating, will lead to a savings for Ocean County as it repays bond debt, freeholders said.
The county has refinanced nearly $32 million of bond debt, securing a lower interest rate on the debt, leading to $3 million in savings, said Freeholder John Bartlett.
“The county on June 19 successfully refunded $31.98 million of previously issued debt, that is, general obligation bonds in the county of Ocean that could be callable.”
The debt was not extended, the county will owe the money for the same amount of time as previous, just at a lower rate, Bartlett said. The bond notes were on a variety of bonding issues but bundled together for the refinancing.
“They are reissued for no period of time longer than they were originally, so we’re not extending the debt in this time, but what we are doing is taking advantage of two things: the county’s triple A bond rating… and the fact that interest rates are particularly low,” Bartlett said.
Jaffries and Company offered 1.8 percent interest cost, where the previous rate was upward of 5 percent, Bartlett said. Twelve bidders came forward and 1.8 percent was the lowest bid.
The cost to reissue the bonds is about $500,000, but even after the costs, the county is expected to save more than $3 million, said the freeholder.
“That’s more than we expected at first,” Bartlett.