New Castle News

August 30, 2013

City saves on bond issue refinancing

By Staff
New Castle News

NEW CASTLE — The city of New Castle will save nearly $156,000 through the refinancing of a 2004 bond issue.

The city closed on a $3,170,000 loan from First Niagara Bank last week, according to investment banker Joseph Muscatello.

City council approved the borrowing last month.

The interest rate on the 11-year loan is 2.6 percent.

Muscatello, of Boenning and Scattergood of Pittsburgh, said the loan does not extend the term of the bond issue, which runs through 2024, nor does it increase the annual debt service payment.

The current outstanding debt on the issue is a principal of $2,880,000.

The city initially had planned to refinance through another bond issue in May. However, it was not pursued because of a poor bond market, so the city opted to obtain a low-interest bank loan.

The original amount of the bond issue to cover sewer improvements was $4,145,000.