McALLEN – In a joint meeting held Monday between the McAllen City Commission and the McAllen Public Utility (MPU) Board a motion was passed to approve the sale and delivery of a general obligation refunding bond series.
MPU approved a $17 million bond issuance, which was a refinance of a previous 2005 Water & Sewer Bond issuance. Market trends suggested that this was an optimal time to refinance a portion of the existing debt in order to lower debt-financing costs to the City.
By refinancing this bond, MPU was able to secure a much lower interest rate, saving MPU approximately $3.9 million in total indebtedness over a 15-year period.
“On behalf of the McAllen Public Utility Board, we are extremely fortunate in being able to leverage the current financial market conditions to benefit our rate payers,” said Mark Vega P.E., MPU General Manager. “Our goal at MPU is to provide the best water and waste water services to all our citizens and we inched closer to that goal this week. We first want to thank our McAllen Public Utility Board for their vision and secondly, to everyone who worked so diligently for this opportunity to materialize.”
What this means to the average ratepayer of MPU is that funds, which were previously allocated for debt repayment, can now be directed toward system improvements.
Bond refundings are similar to the refinancing of mortgages. Existing debt is prepaid and new debt, at a lower interest rate, is issued to replace the original debt.
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cityofmcallen @cityofmcallen McAllen TX