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Schroeder refinances more old debt, saving taxpayers another $14 million

September 20, 2012
Press Release

For the second time this month, Buffalo Comptroller Mark J.F. Schroeder sold a bond that lowers the interest rate on school debt, this time resulting in a budgetary savings of more than $14 millionfor Buffalo taxpayers.
Similar to a homeowner refinancing a mortgage, we took advantage of low interest rates and the citys improved credit rating to dramatically lower interest costs on this debt, said Schroeder.
The refinancing, known as a refunding bond, lowered the interest rate on 2001 school debt from 5.23 percent to 3.08 percent. ?It will result in an annual budgetary savings for the schooldistrict of $737,000 each year until 2031.
Earlier this month, Schroeder refinanced 2002 school debt that saved taxpayers more than $6.6 million. ?Schroeder sold another refunding bond in April that saved taxpayers $1.6 million.
As long as interest rates are low, and our credit rating keeps improving, we are going to continue to pursue the refinancing of debt that has already saved taxpayers more than $22 million just sinceApril, said Schroeder.
In anticipation of the two September bond sales, 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 from Moodys and an A from Standard & Poors.
Two rating agencies had even higher ratings just for this latest bond sale. ?This bond was rated Aa3 by Moodys, one notch higher than the citys current A1 rating with Moodys. ?Thebond was rated AA- with a positive outlook by Standard & Poors, two notches higher than the citys current A rating with a stable outlook from S&P.
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