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Schroeder refinances more old debt, saving taxpayers another $14 million
Bond sale is the second refinancing of school debt this month
SEPTEMBER 20, 2012 - For the second time this month, Buffalo Comptroller Mark J.F. Schroeder sold a bond that lowers the interest rate on school debt, this time resulting in a budgetary savings of more than $14 million for Buffalo taxpayers.
“Similar to a homeowner refinancing a mortgage, we took advantage of low interest rates and the city’s improved credit rating to dramatically lower interest costs on this debt,” said Schroeder.
The refinancing, known as a refunding bond, lowered the interest rate on 2001 school debt from 5.23 percent to 3.08 percent. It will result in an annual budgetary savings for the school district of $737,000 each year until 2031.
Earlier this month, Schroeder refinanced 2002 school debt that saved taxpayers more than $6.6 million. Schroeder sold another refunding bond in April that saved taxpayers $1.6 million.
“As long as interest rates are low, and our credit rating keeps improving, we are going to continue to pursue the refinancing of debt that has already saved taxpayers more than $22 million just since April,” said Schroeder.
In anticipation of the two September bond sales, each of the “Big Three” national credit rating agencies affirmed the city’s bond ratings from earlier this year, including an “A+” from Fitch, an “A1” from Moody’s and an “A” from Standard & Poor’s.
Two rating agencies had even higher ratings just for this latest bond sale. This bond was rated “Aa3” by Moody’s, one notch higher than the city’s current “A1” rating with Moody’s. The bond was rated “AA-” with a positive outlook by Standard & Poor’s, two notches higher than the city’s current “A” rating with a stable outlook from S&P.
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Photos by Angel Art LTP, compliments of the Greater Buffalo Convention and Visitors Bureau. Additional photos by Adrian Roselli, compliments of Algonquin Studios