GENEVA – Thanks to low interest rates, Kane County's government has completed a debt refinancing that is expected to save the county about $2.3 million.
Tuesday, the Kane County Board signed off on the issue of about $32 million in bonds. The debt certificates were issued to cover the amount of debt the county still owes from the construction of the county jail and the Juvenile Justice Center.
Those bonds, issued in 2002 and 2005-2006, allowed the county to borrow $42 million to pay for the projects.
But that debt was borrowed at a time of significantly higher interest rates, and the original bonds were issued under average interest rates of 4.45 percent to 4.66 percent, depending on the particular series.
Under current financial conditions, the county's financial adviser, Speer Financial, of Chicago, believed the county could refinance the debt to a rate of around 2 percent.
So, Kane County officials followed Speer's guidance and put the bond financing up for bid.
A competitive sale took place on March 11. And the results were "amazing," said David Phillips, of Speer.
"It really worked out well," Phillips said.
He said about two dozen bids were received, and the county's $32 million in debt was purchased by Robert W. Baird & Company, of Milwaukee, at a rate of about 2.11 percent.
Over the next seven years, that refinancing is expected to save the county $2.35 million in interest costs, Phillips said.
The bond refinancing news was greeted by a loud ovation from the Kane County Board, who approved the new bonds unanimously.