Town Refinances Bonds, Reducing Interest Costs to 1.39% from over 3.4%
Farmingville, NY - On October 22, Supervisor Ed Romaine announced that the Town of Brookhaven has refinanced the 12 years of outstanding Principal for the 2009 Municipal Bond Bank Bonds and 2010 Recovery Zone Economic Development Bonds. The aggregate Principal amount of bonds that were refunded was $19,315,000, and the refinanced amount was reduced to $16,670,000 over the remaining life of the bonds. By refinancing and taking advantage of lower market interest rates, the Town was able to achieve $2,136,123 budgetary savings in Interest Costs until the final maturity of 2031. This represents a net present value savings of 10.16%.
The Town was paying approximately 3.4% in annual Interest Costs on the original bond issues, and the refinancing reduced the overall True Interest Cost to 1.39% annually. The Town’s existing credit rating of AAA from Standard & Poor’s, along with the recent upgrade to Aaa from Moody’s Investor’s Services contributed to the overall low interest costs the Town received in the sale of the refunded bond.
Supervisor Romaine said, "The Town’s financial team has been extremely diligent in their efforts to save the Brookhaven tax payer millions of dollars. I am very proud of the direction that the Town is going in and expect that we will continue to maintain our strong financial position for many years to come.”
Councilwoman Jane Bonner, the Town Board liaison to the Finance Department said, "I commend everyone in the Department of Finance who work day-to-day to improve our financial stability. Brookhaven Town finances are getting stronger and the real winners are the taxpayers who can rest assured that we are doing the all that we can to protect their interests."
Division of Public Information * Office of the Supervisor
One Independence Hill • Farmingville • NY 11738 • Phone 631-451-6595
