Hennepin County to save at least $6 million by refinancing bonds

Last update: November 3, 2009 - 8:08 PM

Taking advantage of a downturn in interest rates, the Hennepin County Board voted Tuesday to refinance $141 million of its old debt.

At the same time, commissioners also approved $80 million in new bonds for projects. County officials will decide whether to issue them as taxable bonds -- the so-called Build America Bonds -- or as tax-exempt bonds, as provided under the federal stimulus program.

Refinancing will save the county at least $6 million to $7 million over the next 10 years and possibly more, said County Finance Director Dave Lawless. The savings will be used to help rein in future property tax levies, he said.

With interest rates as low as 2 percent, many cities have rushed to refinance their debt. Municipal bonds are traditionally considered a safe investment, and Hennepin County's bonds have uniformly received the highest possible rating since the 1980s.

The county has the option with most of its bonds to refund the amount left on them if current interest rates dip below the rates on the bonds, Lawless said.

KEVIN DUCHSCHERE