The Town of Wake Forest will net nearly $400,000 in interest savings through a general obligation bond refinancing recently approved by the board of commissioners.
During the Wake Forest Board of Commissioners meeting on Feb. 16, Finance Director Aileen Staples presented options for improving the interest rate on $5 million in bonds remaining on the town’s 2006 General Obligation Public Improvement bonds. The current interest rates on the bonds range from 3.6 to 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 seven bids with interest rates ranging from 2.05% to 2.97%. The board approved accepting the proposal from Pinnacle Public Finance with a rate of 2.05%. The rate reduction is expected to create a net present value savings of $367,516.
“We examined the current market and recognized that by refinancing the existing bonds we could save approximately $40,000 a year over the remaining life of the bonds through 2027,” said Staples. Staples says town staff have already met with the Local Government Commission (LGC) and applied for consideration to complete the refunding. The LGC is scheduled to formally approve the transaction on March 1, and the town expects to close on April 1.
The refinancing initiative aligns with Goal 4 of the town’s strategic plan: Enhance Fiscal Strength; Objective B: Maximize return on town funds. To view the strategic plan, visit wakeforestnc.gov and search “strategic plan.” For more information, contact Finance Director Aileen Staples at 919-435-9461 or astaples@wakeforestnc.gov.
