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Town of Leesburg Refinances $6.5 Million in Bonds, Saving Taxpayers $85,000 Annually in Interest
The private bank loan bond will save approximately $340,000 total in debt service costs over the remaining life of the bonds.
Leesburg, VA (June 30, 2017) – The Town of Leesburg recently closed on a bond refinancing that took advantage of historically low market interest rates to refinance previously issued bonds. The Series 2006 B General Obligation bonds were issued at 3.81% interest. The new privately-place bank loan bond, issued through American National Bank, has an interest rate of 1.14%. As a result of the refinancing, the Town will save approximately $85,000 annually in debt service costs, for a total savings of $340,000 over the remaining four-year life of the bonds, including cost of issuance.
In April 2016, the Town’s financial advisor, Davenport & Company, conducted a Request for Proposal for the refinancing loan bond. A number of local, regional and national banks submitted bids, with American National Bank being the low bidder. David Rose, with Davenport, estimated at the time that about one-third of the projected savings was the result of Leesburg’s Triple AAA bond rating (Triple-A ratings from all three major rating agencies), making the Town’s bonds highly desirable in the market.
“This bond issue is a good example of using a refinancing opportunity to reduce the Town’s debt burden without extending the life of the bond,” commented Clark Case, Leesburg’s Director of Finance and Administrative Services.
“Proactively managing the Town’s financial situation, particularly debt, to realize significant cost savings is one of the ways that the staff continues to focus on the Council’s goal of financial sustainability,” noted Kaj Dentler, Leesburg’s Town Manager.
Public Information Officer