Bond Refinancing will Save Taxpayers More Than $1M over 10 Years

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The Select Board this week approved a refinancing of outstanding bonded indebtedness that will save taxpayers more than $1 million over the next 10 years.

Proceeds will re-fund a portion of the town’s July 15, 2010 bond issue and generate total savings of $1,280,220 over the remaining life of the bonds.

This was the fifth refinancing executed over the past decade, engineered by Finance Director Victor Garafalo. Savings in principal and interest exceed $5 million over that period.

The latest sale effectively reduces outstanding principal and interest from $7.5 million to $6.2 million, when factoring in the premium that the successful bidder offered the town as a sweetener. Cash premiums can be used only to reduce outstanding principal.

Most of the $6,240,000 is owed for the Bedford High School repair and renovation. Other projects adding to the total include the purchase of acreage at 350 Concord Road, Middlesex Turnpike expansion land acquisition, and water and sewer projects.

Bond balances can be refinanced once during the life of the bonds, Garafalo explained. “We look every year to see if the market is conducive.” There has to be a certain percentage of savings [to the Town] for the sale to make financial sense.

There were 10 bond underwriters bidding to purchase the bonds, Garafalo said, several more than he anticipated. BNY Mellon Capital Markets was the winning bidder with an average interest rate of 0.384 percent. “I’ve never seen anything like that,” the finance director said. He noted that the last bond sale, in November 2019, was awarded at a rate of 2.18 percent.

“Our financial advisor reviews all the bids for the net interest cost,” factoring in the lower coupon rate and the premium, he said.

Mike Rosenberg can be reached at, or 781-983-1763
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