County considers bond refinancing
Published 12:01 am Wednesday, September 20, 2017
NATCHEZ — County leaders voted Monday to seek interest rate proposals on a county bond that could net an annual savings of approximately $20,000 to $25,000 for Adams County.
The bond was initially used to purchase an industrial development site in 2013.
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E.J. Gregory of Duncan-Williams Investment Bankers said his firm ran an analysis last Friday, and had the county been in the market that day, it could have received a savings of 3.71 percent on the county’s current interest rate. The total savings over the bond’s life would have been approximately $330,000, or $21,000 per year.
In August 2013, the county paid $9.25 million on the 478-acre former International Paper mill property from Rentech Inc. for industrial development. Board President Mike Lazarus said Monday the initial interest rate was approximately 6 percent.
Lazarus said in 2013 supervisors knew when the bond became eligible, the county would want to refinance. Lazarus said the bond is now eligible and interest rates are low enough where the county can get more than the interest rate savings required of 2 percent.
Lazarus said the interest rate market for the bond appears to be in the range of 2.5 percent right now.
While an approximately $21,000 savings per year is not a large amount given the county’s annual budget, Lazarus said the county is constantly trying to come up with methods to save taxpayers’ money.
“The savings on this is not as much as some we have done in the past,” Lazarus said. “It is still saving money. We are not adding to the principal or any time on it.”
Lazarus said the county has no risk in seeking proposals.
“We can put it out there and see what interest rate we get,” Lazarus said. “If we don’t get an interest rate we like, we don’t have to do that.”
District 2 Supervisor David Carter made the motion to seek new interest rates and District 5 Supervisor Calvin Butler seconded the motion. The vote was unanimous.
Duncan-Williams would not get paid until the bond closes. Lazarus said he did not know exactly what the rate Duncan-Williams would receive.
However, Lazarus said the savings are including the company’s fees. Lazarus said after fees the county is still looking at saving $20,000 to $25,000 per year depending on the interest rate received.