Southwestern Michigan College saved taxpayers $2 million Jan. 25 refinancing June 2008 bonds sold to construct Keith H. McKenzie Residence Hall and to add the Student Activity Center to the Charles O. Zollar Building.
SMC will save about $85,000 annually from refinancing $10.88 million of the $14.22 million bonds issued, lowering average interest rate from 5.31 percent to 3.62 percent.
“It’s a pretty sizable reduction. We had some very good participation,” SMC’s bond underwriter, Brodie Killian, Raymond James and Associates’ senior vice president, said Wednesday afternoon. “Gross savings went up about $90,000 since this morning. It looks like our strategy to go out with wider yields turned out to be the right thing because we got people to come in with anchor orders, then others joined in. The percentage savings of refunding bonds is over 11.5 percent, which is very good” against an industry execution standard of 3-5 percent.
“You should be proud of your administration” for attaining Standard and Poor’s AA credit rating. SMC's President Dr. David Mathews, Chief Business Officer Susan Coulston and Controller Michelle Kite and team did a great job for you,” Killian said, noting Morgan Stanley bought 2008 bonds—testimony to SMC’s financial reputation and stability.