Credit: Andria Brooks
Credit: Andria Brooks
MARTA on Thursday refinanced some bonds for a lower rate, a move which will save the transit agency $48 million over 18 years.
The total amount of the bonds being refunded is $283 million. Bids were taken Thursday morning, and of eight bids received, Morgan Stanley came in with the lowest offer for 3.302 percent interest -- down from 4.7 percent. That represents a 17 percent reduction of the debt service over 18 years, said MARTA Treasurer Kevin Hurley.
The refinancing will reduce MARTA's annual debt service on those particular bonds by $1.5 million to $6.1 million, depending on when they mature. The average life of the bonds is 18.1 years.
Hurley said the move was similar to refinancing a mortgage for a lower rate. Better rates are available now for bonds because the market demand in December and January has exceeded supply, he said.
MARTA may look to refinance more bonds in the future if rates remain low, said MARTA's Chief Financial Officer Gordon Hutchinson.
"We will be looking at doing this over the next year," Hutchinson told the MARTA Board of Directors at a Thursday work session. "If it brings more efficiency, we’ll go after them."
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