City of Corpus Christi Receives Historically Low Interest Rates and Anticipates A Net Savings of over $800,000 in Debt Payments
CORPUS CHRISTI, TEXAS – The City of Corpus Christi received a historically low interest rate on its recent general obligation debt issuances. On July 14, 2016, the City of Corpus Christi priced certificates of obligation to complete Bond 2012 projects and also refunded existing general obligation debt.
Earlier this month, the City was able to take advantage of these low rates when Financial Services issued $16.43 million of certificates of obligation at a premium, yielding a true interest cost of 2.68%. The City also issued $16.13 million of general improvement refunding bonds at a premium, yielding a true interest cost of 1.58%. These interest rates are some of the lowest rates the City has ever received. The City is expected to receive a net savings of $800,430.45 or 4.89% – which is equivalent to an average annual debt service savings of $60,000 per year for 15 years.
The financial market has been very volatile over the last several years. Recent global events, actions and comments by the Federal Reserve Board, and terrorist activities, for example, have affected the economy, causing investors to exit the stock markets and to seek out stable, quality investments such as municipal bonds. These series of actions have resulted in historically low municipal bond interest rates.
“Savings like these couldn’t come at a better time as we prepare for the 2017 budget. We may never see rates this low again,” Director of Financial Services Constance P. Sanchez said.