New Castle News

May 24, 2013

Council approves bond issue refinancing

By Staff
New Castle News

NEW CASTLE — Taking advantage of low interest rates, New Castle City Council approved the refinancing of a bond issue last night.

Refinancing of the 2004 bond issue is expected to save the city approximately $120,000, according to Joseph Muscatello, investment banker with Boenning and Scattergood of Pittsburgh.

The savings will be applied to this year’s annual debt service payment, reducing it from $255,052 to $135,573.

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

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

Muscatello said the action taken by the city does not extend the term of the bond issue, which runs through 2024, nor does it increase the annual debt service payment.

The cost to obtain a bond rating from Standard and Poor’s is $6,960, which will be deducted at closing. However, if the city does not proceed with refinancing, the fee will be paid from council’s contingency account.

City officials agreed it is a risk worth taking to save $120,000.