HARLINGEN — The city’s economic development agency has approved the refinancing of its Bass Pro Shop bonds at a more favorable rate which should save $420,000 a year.
The Harlingen Economic Development Corp. has been exploring the refinancing deal for several months. It is made possible by rules which allow an option to have such bonds refinanced every 10 years.
These bonds, issued in 2010, totaled around $32 million and went to construct the Bass Pro Shop facility. The refunding of the bonds will generate a savings of about $420,000 per year in interest costs, or $5.5 million in gross savings, without extending the maturity date of the bonds, HEDC officials said this week.
The HEDC still owes $21.3 million on the Bass Pro bonds as well as on a $4 million loan that will be paid off in two years.
The HEDC took advantage of a more favorable bond market to have the firm Hilltop Securities explore the refinancing.
Currently, the HEDC rating is rated at A-plus with several positive variables, officials said, and that rating could go up, making the bonds more attractive to investors.
The HEDC now pays about $3.2 million a year in annual debt service, but with the refunding of bonds, the debt service would be reduced by about $420,000 per year. Of the $3.2 million in debt service, $2.287 million is for the bond indebtedness.
The new annual debt service would be below $2.3 million per year, with HEDC revenues of slightly over $6 million, the agency said.