Met Council Bond Refinancing Saves Tens of Millions of Dollars
Photo by Gamma Man, Flickr
For the third time in 2012, the Metropolitan Council has taken advantage of rock-bottom interest rates to refinance previously issued general obligation bonds.
In total, this year’s bond refinancing represents a net savings to future taxpayers and wastewater ratepayers of $42 million in present value over the life of the bonds. The savings for the October refinancing of transit capital and wastewater bonds alone is $15.9 million in today’s dollars.
Both Standard & Poor’s and Moody’s reaffirmed the Council’s Triple-A rating for the bond refunding. The highest possible ratings are justified, both rating agencies said, because of the region’s strong and diverse economic foundation, and the Council’s “well-managed financial operations with a history of positive results” (Moody’s) and the Council’s “strong management practices and strong reserves” (S & P).
“This doesn’t represent any new spending,” said Jason Willett, finance director for the Council’s Environmental Services division. “It’s comparable to refinancing your house, and we’re not taking any cash out of the deal.”
The original bond sale proceeds pay for transit capital expenses, such as new bus purchases, and wastewater construction projects, such as treatment plant upgrades and interceptor construction and rehabilitation.