Bond Refinance Saves $

The combination of lower interest rates and Wake County's AAA bond rating allowed the County to refinance portions of general obligation bonds and save taxpayers $4.8 million in interest.

On Tuesday, October 19, the County successfully refunded portions of the 1996, 1997 and 2000 bonds with a net present value savings of $4.8 million. Morgan Stanley won the competitive sale, conducted by the State Treasurer through the electronic bidding process and sealed bids, with a net interest cost of 3.19%.

Currently, all Wake County bonds through 2000 have been refinanced to take advantage of lower interest rates. In October 2003 the 1994 bonds were refunded, also for a net present value savings of $4.8 million. During the past 12 months the refunding of bonds has produced total savings of $9.6 million for the taxpayers of Wake County.

"We're always looking for opportunities to leverage our AAA bond rating and effectively use the market to save taxpayers money," said Wake County Commissioners' Chair Kenn Gardner.

The savings will be put back into the County's multiyear Capital Improvement Plan to finance other County capital projects.

The country's three largest municipal bond rating agencies recently reaffirmed the County's triple-A rating. The County has received the highest possible rating from Moody's since 1973, from Standard & Poors since 1983 and from FITCH since 2000.

General obligation bonds are backed by the full faith and credit of the County, which means that the repayment of the bonds is guaranteed by the County's taxing authority.