SUWANEE - The Suwanee Urban Redevelopment Agency has authorized refinancing of 2006 revenue bonds that were used to help fund construction of Suwanee City Hall. The city still owes about $4 million on the original $6.5 million bonds and, through refinancing at an interest rate of 1.94%, will save approximately $180,000, or about 4.65%, across the 11-year payment period that remains.
Over the next 30 days, the city will work to close on the refinancing agreement with JP Morgan Chase, which has offered a 1.94% fixed interest rate. The original interest rate was 3.5%.
“The city’s debt policy requires that, unless terms are changed, a savings of at least 3% must be realized in order to refinance debt,” says Financial Services Director Amie Sakmar. “Suwanee’s strong financial position – we have a AAA bond rating from Standard & Poor’s – make us a good investment, and market conditions and low interest rates make this a good time to refinance. Premier financial institutions like JP Morgan Chase want to partner with us because we’re a secure bet.”
Suwanee also has about $13 million in general obligation bonds (remaining from $17.7 million in bonds that were originally issued in 2002), which were used to acquire open space and build parks. It refinanced those bonds in 2006 and cannot, according to IRS rules, refinance again within a 10-year period.
