Indianapolis paid an interest rate of 5.25% on its recent issue of qualified Midwestern disaster area bonds issued last month to help finance a new downtown development project on behalf of Eli Lilly & Co.
The city paid 5.25% on the debt with maturities of 2021 through 2027. It secured a rate of 5.5% for bonds with a 2028, 2029 and 2033 maturities, and 5.75% for $15 million of bonds that mature in 2036.
The city paid interest rates ranging from 2.9% through 4.8% for roughly $15 million of taxable bonds issued for the same project.
Prior to the deal, officials said they expected to pay rates of just over 5%. The city-county council passed a measure prohibiting the city from paying more than a 6.5% interest rate on the borrowing.
JPMorgan was senior manager on the deal. The Indianapolis Local Public Improvement Bond Bank issued the debt. The deal is expected to close April 7.
The 2008 federal Midwestern disaster area bond program allows an issuer to structure bonds for qualified projects as tax-exempt that would otherwise have to forgo the tax benefit because they benefit a for-profit company.