Now is the Time for Refinancing Bonds

 

Public finance entails the financing of public projects, such as highways, subways, schools bridges, and others, through the underwriting and issuance of tax-exempt municipal bonds and the investment of those bond proceeds.  Securities and tax laws involve many regulations in the public finance area.

At the present time in the bond market, interest rates are favorable.  After 10 years, municipal bonds can be refinanced, providing cities with a substantial debt savings.  While refinancing the bond will not change the amount of principal left on the loan, it will reduce the amount of interest paid over time.  This factor can have enormous implications.

At times when interest rates fall, refinancing municipal bonds may make economic sense.  Refinancing allows a public agency to capture interest rate savings.  Using savings generated by refinancing municipal bonds, cities can invest money in economic development projects.  The refinance can also free up some dollars for a city’s general fund.

RSG can help cities with the process of municipal bond refinancing.  We specialize in a variety of financial consulting services for cities, counties and other public agencies.  Our clients' needs are diverse — from general fund sustainability to project and program financing to property tax revenue apportionment analysis to financing structures such as general obligation bond issues.  These engagements all require an advisor who understands the complexities of public finance and can deliver thorough and reliable forecasts in a timely manner.  Our team can professionally and intuitively interact with key players on your team, including city and county staff, other financial consultants, underwriters, bond counsel, bond insurers, rating agencies or credit institutions.

Our seasoned consultants can help local government agencies to manage resources and anticipate fiscal challenges before they arise.  We inform decision-makers of the costs of operations and comparative data to other jurisdictions, assist staff in meeting compliance and reporting requirements and leverage existing and future revenues to accomplish projects and programs now