The City of Champaign will save $310,000 over the next seven years by refinancing a portion of the bonds issued in 2007. This is the fourth time the City has refinanced debt in the past several years. The refinanced 2007 bonds carried an interest rate of 3.75%, while new bonds have an average interest rate of 1.89% including all costs of issuance.
The City’s high credit rating helped it achieve this low rate of interest. The City holds triple-A bond ratings from Moody’s Investors Services and Fitch Ratings. No other Illinois municipality outside the Chicago metro area has even one AAA credit rating.
The 2007 bonds raised funds to support development of the site of the former Burnham Hospital and the extension of Olympian Drive west of Mattis Ave. The City pays debt service on the 2007 bonds from the Capital Improvement Fund and the Campustown Area Tax Increment Financing District Fund. The savings will help the City maintain infrastructure and complete development of the former Burnham Hospital site.
To refinance the 2007 bonds, the City issued new bonds to Mesirow Financial, a large Chicago-based financial institution that provides a number of services including underwriting bond issues, working jointly with Backstrom McCarley Berry & Co., a minority-owned investment banking firm based in San Francisco. The 2016 bonds, including costs of issuance, were $5,065,830. In addition to getting excellent execution of the bond sale, contracting with Backstrom furthered the Council Goal to increase the City’s business with minority and women-owned enterprises.
Contact: Richard Schnuer, Finance Director | 217-403-8943