The Southfield Redevelopment Authority Board of Directors met to discuss refinancing the interest rate on a 2010-A Infrastructure Bond.
The $12.5 million bond was issued in 2010 for roadways and other public infrastructure at Union Point, the site shared by Abington, Rockland, and Weymouth. The interest rate on that bond is 7.75%.
Member Kevin Donovan says they’re looking into lowering that interest rate.
“I had asked Eric [Hart] to have MuniCap, who’s our fund administrator run a pro forma on a conservative basis,” said Donovan. “This is conservative, meaning we could probably avail ourselves of more savings.”
He said MuniCap said on that basis, they could get an interest rate of 4.25%. The current debt and interest on the 20-year-loan is $1.1 million dollars. They received a proposal from Stifel Financial Corp.
Donovan is considering firms for an independent third-party review of that proposal – Professional Finance Management of Boston, Hilltop Securities of Rhode Island, and MuniCap of Maryland.
“If we were to do a 4.25 percent, it would drop it down to roughly $800,000,” said Donovan. “You have the savings of a little over $300,000 in the first year – that’s for 2021. Over the life, the 20-year life of the bond if we were to refinance on this pro forma, we could save roughly $2.7 million, which is about a 20 percent savings.”
The Board voted unanimously to hire Hinckley Allen as bond counsel and authorize the third-party independent review of a refinancing proposal.
