City says bond refi to save $2M
WILMINGTON, NC (WWAY) — Refinancing bonds should save Wilmington millions.
The city says it recently refinanced four bonds, combining them into one 30-year bond. Because of the city’s AA+ bond rating, which is similar to a credit rating, the bonds could be refinanced at a much lower interest rate, saving the city almost $2 million over the first six years of the loan. Several factors determine bond ratings, such as financial health and stability and the amount in the city’s fund balance, which is like a savings account, the city says.
Like most city governments, Wilmington issues bonds to pay for and maintain facilities such as parking decks, police headquarters and fire stations. The projects are paid back over time, like a homeowner pays a monthly mortgage.
The city says bonds are the only way the city can afford to pay for these types of projects that cost millions of dollars without large, sudden tax increases.
According to the NC Department of the Treasurer, Wilmington’s amount of debt is low-to-average as compared to other cities in the state with populations over 100,000, the city says.
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