Falling Rates Lead Cities, Counties, Universities to Join Homeowners in Refinancing
CHARLOTTE, N.C.–(BUSINESS WIRE)–Sept. 24, 2001–The Federal Reserve’s decision Sept. 17 to cut interest rates for the eighth time this year was good news for homeowners looking to refinance their mortgages.
However, homeowners aren’t the only borrowers taking advantage of falling interest rates.
Cities, counties, universities and other institutions also are restructuring their long-term debt to free more dollars for projects and ease the burden on citizens, students and others who must pay back the debt through taxes or fees.
“With interest rates dropping, we are working with several clients to refinance bonds,” says Don Ubell, head of the Public Finance Group at Parker, Poe, Adams &Bernstein, based in Charlotte. “Lower rates also make projects funded through bond issues more affordable in general.”
In Winston-Salem, city leaders worked with Parker Poe to refinance nearly $48 million in bonds approved from 1988 to 1995 for water and sewer improvements. Two of the bond issues were shifted from variable rates to a fixed low rate, and a third fixed rate from 1995 was refinanced at a lower rate. In all, Winston-Salem Chief Financial Officer Louis Colclough estimates the city will save about $800,000 in future interest. “This will help us keep what have been called the lowest (water and sewer) rates in the Southeast,” Colclough said. “Refinancing benefits both the taxpayer and the ratepayer.”