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Taxpayers to Save Nearly $1M Through Debt Refinancing

Commissioners Steve Chronister, Doug Hoke and Chris Reilly today unanimously approved the refinancing of approximately $74 million in debt stemming primarily from the construction of the York County Judicial Center and renovations to the York County Administrative Center.

The County is refinancing a bank loan into publicly offered floating rate notes.DollarSign

The transaction is expected to close on March 23 with a variable interest rate projected to be about 0.5 % less than the County is currently paying on the existing bank debt. As a result, taxpayers will save an estimated $450,000 in 2015, $350,000 in 2016 and $170,000 in 2017.

The savings is possible because of the County’s high credit rating, said Louis J. Verdelli, managing director of municipal finance for RBC Capital Markets, which is co-underwriting the transaction with PNC Capital Markets.

“The County’s strong credit is crucial because investors are comfortable the County is in strong financial shape to repay the debt,” Verdelli said. “Without that trust, the County wouldn’t be able to obtain this type of financing and benefit from the resulting savings.”

The County currently has a AA (Stable) long-term bond rating, and expects the rating to be reaffirmed in connection with this transaction. “AA” is the second-highest in the range of ratings within Standard & Poor’s scale. The County’s credit rating was upgraded from AA- in 2010.

“Credit ratings have a real, long-term impact on taxpayers,” said Commissioner Doug Hoke. “Our rating represents years of committment by our administration to improve the County’s financial position for the benefit of our community.”

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