Council approves bond refinancing

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Finance > Markets disagree on county’s credit rating

By Arin McKenna

The Los Alamos County Council unanimously approved an ordinance authorizing the county to re-fund $40,085,000 in outstanding Gross Receipts Tax Improvement Bonds which mature on and after June 1, 2019 and are callable as of June 1, 2018 at a lower interest rate. The refinancing is expected to net $1,151,198 in savings for the county.
Re-funding the bonds is similar to the concept of refinancing a home at a lower interest rate. The interest rate on the original bonds was approximately 5.4 percent. Re-funding will reduce that rate to approximately 2.6 percent.
“I’m pleased to say that today we successfully marketed this re-funded bond issue,” Deputy County Administrator Steven Lynne said.
RBC Capital Markets is serving as the bond underwriter for the county, facilitating the agreement by buying the bonds and reselling them.
Vice President Erik Harrigan represented RBC at Tuesday’s council meeting. Peter Franklin, bond counsel for Modrall Sperling law firm, was also available to answer questions.
The par amount (principal) of the bonds was $38,235,000. The majority were sold to major investors Tuesday morning. The $4 million in bonds remaining with the underwriters will be sold at a later date.

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