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Bond refinancing to save Wake Forest over $300K

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WAKE FOREST — The town of Wake Forest will net over $300,000 in interest savings through a general obligation bond refinancing recently approved by the Wake Forest Board of Commissioners.

During the board’s meeting on Nov. 19, Chief Financial Officer Aileen Staples presented options for improving the interest rate on $3.8 million in bonds remaining on the town’s 2009 Public Improvement General Obligation Bonds. The current interest rates on the bonds range from 2-4 percent.

As part of the process, Davenport & Company LLC, the town’s financial advisor, distributed a Request for Proposals to secure a bank commitment for the refinancing. In response, the town received 13 bids with interest rates ranging from 1.79 percent to 3.25 percent.

During the Nov. 19 meeting, the board approved accepting the proposal from Benchmark Community Bank with a rate of 1.79 percent. The rate reduction is expected to create a net present value savings of $318,576.

“We examined the current market and recognized that by refinancing the existing bonds we could save over $30,000 a year over the remaining life of the bonds through 2030,” said Staples.

Staples says town staff have already met with the Local Government Commission and applied for consideration to complete the refunding. The LGC was scheduled to formally approve the transaction Tuesday, and the town expects to close on Dec. 23.

The refinancing initiative aligns with Goal 4 of the town’s strategic plan: Enhance Fiscal Strength. To view the strategic plan, visit wakeforestnc.gov and search “strategic plan.”

For more information, contact Chief Financial Officer Aileen Staples at 919-435-9461 or astaples@wakeforestnc.gov.

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