HANNIBAL | The recent refinancing of 2013 sewer bonds will save the Hannibal Board of Public Works nearly $1 million.
“This is really fantastic news for you all,” said bond counsel Mark Grimm of Gilmore & Bell in St. Louis.
The sale of the 2020 bonds, which occurred on March 17, required approval by both the HBPW Board and Hannibal City Council.
“Five bidders submitted rates,” said HBPW Interim General Manager Mathew Munzlinger during the March 17 meeting of the city council. “The lowest was a true interest rate cost of less than 2% which will result in roughly $940,000 worth of savings over 13 years remaining for the bonds.”
Munzlinger added that the revenue savings will be seen without needing to extend the time frame of the bonds or borrow additional funds.
The savings that will be seen are considerably more than had been anticipated by the HBPW.
“When we started the (bond refinancing) process back in December we were estimated to save roughly $630,000,” Munzlinger said. “With the happenings in the stock market and interest rates doing what they have done recently we were able to realize a larger savings.”
Because of recent turmoil in both the bond and stock markets the bond savings were almost not seen by the HBPW. It (bond market) has been up and down quite a bit,” Grimm said. “Last week (March 9-13) we were wondering if we should even go forward with the sale or not.”
According to Abraham Gray, the HBPW's finance director, the winning bidder had sold all the bonds to its investors in approximately an hour.
“Investors saw credit in our utility even in these times,” Gray said.
Grimm, who estimated the savings the HBPW will see over the next 13 years will amount to approximately $60,000 annually, applauded the utility.
“It was just a tremendous day for the board to accomplish these savings,” he said. “It is obviously money you can put towards something else.”
Grimm added that the HBPW's fiscal track record helped attract investors.
“It is a credit to the confidence that people have in the board's operations, the good credit rating that you all have and your stewardship,” he said. “With what's going on with the market to get five bids with these rates is really a testimony to your administration and staff.”