October 6, 2016 – The Alabama State Bond
Commission successfully refinanced $105.1 million of outstanding general
obligation bonds, resulting in net present value savings of more than $11
million for Alabama taxpayers.
The refinance reduced the effective interest rate on the debt by more than
half, from 4.54 percent to 2.18 percent, on bonds that were originally issued
in 2007 and 2010 to fund capital improvements for industry recruitment and
economic development. The refinancing issue was sold by competitive bid, with
Citi submitting the lowest interest rate bid.
The transaction group also accomplished a restructuring of the State's general
obligation debt service to eliminate "peaks" and generate significant
budgetary relief in the coming years without extending the maturity of any of
the State's general obligation debt.
Since Gov. Robert Bentley took office, the administration's bond refinancing
program has saved taxpayers over $100 million in future interest payments.
"This administration will continue to look for ways to generate savings
without undercutting essential public services," said Finance Director
Clinton Carter, who was appointed by Gov. Bentley earlier this month.