The University System of Maryland has refinanced $127 million in public bonds, in a deal it says will result in a $13.4 million savings to Maryland taxpayers.
The 11-university system refinanced $127 million in Series B Build America Bonds it had issued about 10 years ago. USM closed the refinancing transaction on Oct. 2, after a recent debt auction attracted seven bidders. The winning bid came from Citigroup Capital Markets. As a result of transaction, the taxpayer-funded university system will owe $13.4 million less to bondholders.
Build America Bonds are taxable municipal bonds introduced by the Obama Administration in 2009 as part of the American Recovery and Reinvestment Act, an effort to stimulate the economy following the 2008 financial crisis. Robert Page, USM’s associate vice chancellor of financial affairs, explained those bonds carried high interest rates of about 4.8% to 5.85%, and were taxable to the holders of the bonds.
Through this refinancing, the university has instead…Read the full story from the Washington Business Journal.