The Conway City Council last week quickly approved the sale of $28 million of taxable industrial revenue bonds for a Hewlett-Packard Co. facility in the city after the Federal Reserve Bank of St. Louis and other regional banks cut short-term interest rates.
The council met in special session to approve the bond sale after the underwriter said the lower rate — which went into effect the morning after the council approved the sale in a special session — would make the bonds less attractive to investors.
Edmond G. Hurst, a senior managing director at Crews & Associates, lead underwriter on the issue, told councilors that if they waited for just one day, Arkansas law would have required the lower interest rate. Hurst said the city’s approval means the lower rate will not be locked in for the duration of the 10-year bonds.
The bonds will be supported with revenue from Hewlett-Packard’s lease with the private nonprofit Conway Development Corp., which will build and own the facility. The state will also provide $10 million for debt service on the bonds.
The state and the city attracted the facility by offering incentives expected to total $43.7 million, including $35.4 million from the state. Gov. Mike Beebe said the facility, which will employ about 1,200, will open in late 2009.
“We would not have been in the market without incentives,” Beebe said.
Conway is located about 30 miles north of Little Rock.
