Lackawanna County expects refinancing to yield $5M in savings

The Lackawanna County, Pa., administration expects to save $5.25 million by refinancing another $58.49 million of the county's debt.

The savings will come from a reduced interest rate -- 3.21 percent, down from the previous 5.1 percent interest rate -- over the remaining life of the bond, according to information Andy Wallace, chief of staff to the county commissioners, compiled.

The bond, which represents nearly one-quarter of the county's $226.52 million total debt, is scheduled to be paid back between now and Sept. 1, 2035.

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Commissioner Jerry Notarianni described the move as an important part of managing the county's finances when residents can't afford higher taxes, the administration wants to avoid cutting programs and the local economy hasn't picked up yet.

"Any business, you want to spend as little as you can," he said. "You have to increase revenue or decrease spending in order to survive in the business world."

Boenning & Scattergood and PNC Capital Markets underwrote the bonds, which were sold on the open market to more than a dozen buyers. Lackawanna County closed the deal on Tuesday.

The county paid $304,248 in fees to various consultants related to the transaction. The largest sums included $110,000 to bond counsel Stevens and Lee, $100,000 to advisor Financial Solutions, $30,000 to Standard & Poor's Global Ratings and $20,000 each to co-underwriters Nepa & McGraw and Rogan Law.

The move follows refinancing another $72.28 million in debt last year, which consultants projected would save $16.14 million over two decades.

Commissioner Patrick O'Malley said the administration is looking to take advantage of the county's upgraded bond rating and wants to refinance more debt next year.

Representatives already discussed the idea with financial advisors, who are reviewing options.

"Whatever is available, we're going to do," Wallace said.

Tribune Content Agency
Budgets Public finance Refinance Pennsylvania
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