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Renegotiated bond issue to save $1 million
Renegotiated bond issue to save $1million
Dunedin (Friday, 10 October 2014) – Dunedin City Treasury this week renegotiated a $75m loan that will save the DCHL Group (which includes the DCC) around $1 million in interest costs per year.
Dunedin City Treasury manages the funds and long term debt of DCHL and the DCC. Total Group debt, which includes the DCC, was $621m at 30 June 2014. The Group had a $75m loan on fixed interest that was due for renewal, but the overall reducing debt requirements, meant that a smaller loan of $70m was now required. This fact, coupled with a reduced rate of interest for the debt means the group will save at least a million dollars a year for the period of the loan.
Treasury Manager Richard Davey says it is a bit like renegotiating your mortgage. Through ANZ and Westpac we have arranged a better deal by paying a lower interest rate over a longer period.
“Spreading the maturity date of the Group’s loans, helps improve the average long term cost of the debt.”
The next significant maturity date will be in October 2015.
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