Opp council to refinance bonds, get $425K
Published 12:00 am Tuesday, April 4, 2017
The Opp City Council has the opportunity to refinance the remaining nearly $5 million from its 2007 bond issue and get back nearly a half-million in proceeds for city projects.
Ken Funderburk of Stifel Merchant Capital said that this refinance would employ a new method for refinancing, but the city would have a net savings of $425,000.
Funderburk explained that with the new method, that he’s able to give the council a figure.
“Previously doing refunds we tell you what we think we can achieve or range of X,” he said. Additionally, instead of going on the market and selling bonds, the debt is sold to a single buyer.
The potential buyer has agreed to the price until April 15.
The interest rate on the money would be 3.15 percent. The current rate on the money is more than 4 percent.
The $425,000 in savings is much better than the anticipated $340,000 to $350,000 that Funderburk estimated they could get in the open market.
The $425,000 is net savings after all the fees are taken out, he said.
He said the new option is less expensive, less time consuming and more user-friendly.
“It’s more streamlined,” he said.
Opp Mayor Becky Bracke said that the money would be used for utility projects.
“We aren’t sure which projects yet,” she said.