Parker Poe suggests refinancing $5.5 M bond

BLYTHEWOOD – Attorney Ray Jones of Parker Poe, the Town’s bond consultant for the $5.5 million bond issued by the Blythewood Facilities Corporation in 2010, told Council Monday evening that it might want to take advantage of an opportunity to refinance that bond under advance refunding which, he said, is a financing technique that allows an issuer to obtain the benefit of lower interest rates at a time when the outstanding bonds are not currently callable.

Jones told Council that because Congress is considering dropping advance refunding as part of their tax reform law proposal, and because interest rates are lower than they may be in the summer of 2018 when the 2010 bonds are callable, they might want to act right away.

Jones said that under current law, the Town may do an advance refunding now when interest rates are low and possibly lower than in summer of 2018. Projections are, he said, that the Town could save several hundred thousand dollars by doing so.

Jones said that if the Town does not act now to refinance the bonds, and Congress passes the legislation, the Town would not be able to do an advance refunding until the normal call date time frame, which would be within the 90 days of the Sept. 1 call date.

“We felt it wise to put the question before Council and are doing so with a first reading of the proposed ordinance on this refinancing,” Town Administrator Gary Park told Council. “If Council agrees, there will be a public hearing and second reading.

Council voted to pass first reading and has scheduled a special called meeting on Dec. 8 to meet the bond issuance schedule.

Parker said Jones would be at the meeting to answer questions.