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Sherwood refinances debt, expected to result in savings to taxpayers

A shot of Sherwood City Hall and the Sherwood Public Library taken from Pine Street.Taking advantage of low interest rates, the city of Sherwood saved its citizen taxpayers more than $700,000 this month by refinancing two old loans. Sherwood refinanced $5.2 million in old loans at a true interest rate of 1.67 percent, city officials report.

This will save about $60,000 annually in interest costs over the 12-year life of the bonds. Proceeds from this bond sale will be used to refinance loans taken out in 2003 and 2006 to construct City Hall and reconstruct some Downtown Streets.

"I am very happy with this result," said City Manager Joseph Gall, "It is an outward manifestation of the sound financial decisions the Budget Committee and the City Council have been making over the past few years."

City officials choose to sell the bonds in the competitive market. Five financial firms bid on the bonds. All the bids had true interest costs of less than 2 percent.

As part of this refinancing, Moody’s Investors Services evaluated the city’s finances and gave the city an A1 rating and an Aa3 rating. As part of its ratings report, Moody’s cited city officials’ prudent efforts regarding financial decisions and the rapid improvement of the City’s finances over the past five years.

This refinancing is the latest step in the finance department’s effort to reduce and consolidate the City’s aging loan portfolio. In the last two years, the number of external loans has been reduced from 17 to 10, with several being paid off early.

— Submitted by the city of Sherwood




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