MTA looking at debt refinancing optionsBy
Debt refinancing is, by no stretch of the imagination, not a particularly sexy issue, but for the MTA, with so much debt on its books and more to come, refinancing could help the cash-starved agency save some dollars. So with borrowing costs nearing a two-decade low, the MTA is looking to refinance in order to save some money, Bloomberg News reported today.
According to the report, the authority may refinance around $6.7 billion in debt that was sold in 2002 and comes due in 2025. With the average ten-year rate below 2 percent — and over two percentage points lower than it was ten years ago — the MTA says it could realize some cost savings with such a move, but officials could not provide an exact figure. As Larry Littlefield noted at Streetsblog, the authority should proceed carefully here as they do not want to extend their debt obligations too far beyond the original term of the bonds.
In other financing news, MTA Chairman Joe Lhota asked the State Senate this week to provide the MTA with a debt issuance exemption. Currently, the state levies a charge of $8.40 for every $1000 of a debt issued, and by securing an exemption in advance of the MTA’s next round of bond offers, the authority could save over $50 million.