The Birmingham City Council unanimously approved $40 million in General Obligation Warrants and Refinanced Bonds
PRESS RELEASE Tuesday, July 31, 2018
Contact: Chiara Perry
The Birmingham City Council unanimously approved $40 million in General Obligation Warrants and Refinanced Bonds, which will allow for capital funding for a several projects throughout the city.
The financing consists of two parts as follows:
Approximately $40 million General Obligation Refunding Bonds
- Refinances Series 2007A Bonds
- Projected savings from lower interest rate is $7 million, with a net present value of $5.5 million
- The net present value savings as a percentage of the principal amount of bonds being refunded is approximately 11.8 percent, indicated a very efficient refinancing transaction
- True Interest Cost is approximately 3.18 percent
- Savings will remain in the Bond Reserve Fund to be used for any future voted bond issue
- Principal and interest payments will be over the same period as the outstanding bonds, through 2033
Approximately $40 million General Obligation Warrants
Warrant issue will provide capital funds for the following projects:
- Bus Rapid Transit Grant Match $20,000,000
- BRT Additional $1,750,000
- Landfill Cell $7,500,000
- Industrial/Tech Park $4,600,000
- Legion Field Improvements $2,250,000
- Boutwell Improvements $750,000
- Central Library Stairs $1,500,000
- Wylam Library Additional Funds $800,000
- Crossplex Basketball Courts $600,000
The Warrants will be repaid over 25 years. Principal and interest payments will be approximately $1.4 million in 2019 and $2.4 million through 2043 and will be paid from the General Fund. $2 million was budgeted for 2019 for this anticipated issue.
The anticipated interest rate is approximately 3.68 percent and this borrowing should have no effect on the City’s credit rating as the agencies are expecting it, according to the Finance Department.
This press release is a contribution from Cody Owens in the Office of Public Information for the Birmingham City Council. For media inquiries please contact Chiara Perry, Interim Director of Public Information at 205.383.8432.