The Bethlehem Authority, the city’s financial arm of the water system, and and city administrators completed a bond refinancing that netted $2.47 Million in savings from the previous 2014 Bbnd issue. The deal was structured such that it generated approximately $9.9 in “new money” that will provide the funds for water system infrastructure improvements over the next several years.

City council and the Authority board approved the refinancing several months ago conditioned upon savings of at least 5 percent and to maintain the current water system debt service payments in line with what the current debt service payments are. Both of these objectives were met as the savings amounted to 8.7 percent over the previous bond deal and the City’s annual debt service was kept close to the current annual payments of $8.56 million.

The deal was not without its surprises and angst however.

As recently as March of this year it appeared that savings would be between 9 percent and 10 percent, but the market volatility since then caused the savings to crash below the 5 percent threshold just three weeks ago. The market rebounded just in time and the authority was able to lock in the interest rates necessary to achieve their goals before the market went south again just after the authority sold the bonds. Authority Executive Director Stephen Repasch credited the success of the deal to a lot of hard work by the authority’s and city’s advisors, the authority board and staff and city staff. And of course a little bit of timely luck with the bond markets.

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