The Allen Economic Development Corporation (AEDC) is taking advantage of lower interest rates to make the most of taxpayer’s money.
Council members approved a plan to refund $11.96 million in existing bonds, which carried a 3.5% to 4.5% interest rate. The new interest rates will range from 1.06% to 2.99%. The payoff date was reduced from 2032 to 2027.
Bonds are a common financing tool used by cities to fund large-scale projects over several years. Similar to refinancing a home, the refunding process helps cities capitalize on more competitive interest rates based on market conditions.
The Allen Economic Development Corporation is funded by a half-cent sales tax on all retail purchases made in Allen. Through this refunding process, AEDC will save $1,108,692.