The City of Sylvania returned to the municipal bond market on July 11 to refinance existing street improvement bonds and will save $547,000 over the next 12 years as a result of the lower interest rate of the refinanced bonds.
The original 20 year bonds were issued in 2004 at an interest rate of 4.12 percent. Prior to this recent bond sale, Standard and Poors reaffirmed the city’s AA+ bond rating. Nine interested companies submitted competitive bids for the new bonds, with Fifth Third Securities bid of 1.73 percent being the successful low bidder.
The face value of the 2004 bonds was $5,300,000, which has been paid down to $3,650,000 over the eight years since issuance.
The bonds were sold in 2004 to finance street improvements around many areas of the city including work on Rockdale, Wakefield, Grenlock, Avon Lane, Amy Lane, Long Street, Franklin St., Handy Street, Silica Drive, Olde Post, Apple Creek, Longfellow, Wedgewood, Brookline, Charlesgate, Coppersmith, Brinthaven, Brintwood, Sylvan Court, Sandlewood Court and New England Lane.
This is the second year in the row the City of Sylvania has refinanced an earlier bond issue to benefit from the current lower interest rates. Last year, $1,090,000 of remaining principal from a 1998 bond issue was refinanced to save about $10,000 per year for the remaining eight years of that bond issue.
The City of Sylvania is not selling any new debt this year and remains below the legal limit permitted the city, and about average for a city of Sylvania’s size. The use of these long-term bonds has allowed the city to update and expand its infrastructure and to pay for those improvements over the course of their useful life.