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Schroeder saves taxpayers $6.6 million in interest costs by refinancing 2002 school bond

September 7, 2012
Press Release

Buffalo Comptroller Mark J.F. Schroeder sold a bond that lowers the interest rate on 2002 school debt by more than three percentage points, to 2.15 percent, resulting in a budgetary savings of morethan $6.6 million for Buffalo taxpayers.
There was a strong demand from both retail and institutional investors, which is a testament to the citys sound financial condition, said Schroeder.
The refinancing of the nearly $32 million in debt, known as a refunding bond, was purchased by Raymond James Morgan Keegan and sold to the investor community.  It will result in an annualbudgetary savings of more than a half million dollars each year until 2024.
Buffalos improved bond rating is continuing to pay off, and taxpayers are reaping the benefits, said Schroeder, who pointed out that the 2.15 percent interest rate is even lower than the ratesfrom the three record-breaking bond sales this spring, which were 2.25, 2.48, and 2.96 percent.
In anticipation of the bond sale, each of the Big Three national credit rating agencies affirmed  the citys bond ratings from earlier this year, including an A+ from Fitch, an A1 fromMoodys and an A from Standard & Poors.
Schroeder said that he will be refinancing more of the school districts debt later this month, thanks to a bond refunding resolution passed by the Common Council Tuesday.  Budgetary savingsfrom that sale are expected to exceed $13 million.
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