Baton Rouge: The State of Louisiana went to market this week to refinance more than $205 million in General Obligation bonds, resulting in $10.7 million in gross savings for taxpayers, according to State Treasurer John Kennedy.
"We took full advantage of the market to refinance outstanding debt at a significantly lower interest rate," said Treasurer Kennedy. "This refinancing will save the state approximately $2.9 million a year over four years."
Interest rates on the refinanced Series 2005 bonds ranged from 1.5 percent to 2.87 percent, compared to original rates of 3.8 percent to 5.25 percent.
The state utilized what is known as a delayed draw, meaning the interest rate is locked in now, but the refunding will actually take place in 2015. By comparison, a traditional refunding would have saved the state $7.4 million.