Sacramento County refinances bonds
Published 12:00 am PST Wednesday, March 5, 2008
SACRAMENTO – The county agreed Tuesday to refinance nearly $347 million in bonds used to cover pension obligations.
The county acted quickly after interest rates on the current financing vehicle shot up – a ripple effect of the subprime mortgage meltdown.
County officials said the old bond structure, known as auction-rate securities, had offered a lower interest rate but that the rate recently turned volatile, increasing in one month from 6.5 percent to 8.5 percent.
Refinancing the debt and the higher interest rate of the new bond structure will cost the county $6.5 million this fiscal year and approximately $2.2 million annually, officials said.
– Ed Fletcher
