A third round of bond refinancing ratcheted state savings up to more than $133 million, a news release from state Treasurer Dale Folwell says.
In the latest round, more than $243 million in Grant Anticipation Revenue Vehicles bonds were refunded. Almost $225 million in new, lower-interest bonds were issued, resulting in $19 million in debt service savings.
Folwell and the State and Local Government Finance Division have refinanced more than $1 billion in GARVEE bonds’, general and limited obligation bonds over the past six weeks. That resulted in the reduction of debt service costs by more than $133 million.
“The refunding of the GARVEE bonds will allow additional resources to be available for important transportation projects across the state,” Folwell said in the news release.
GARVEE bonds provide financing for various transportation projects and the State Transportation Improvement Program. Debt service on the bond is then paid from federal reimbursements to the state.
“The refunding of the general and limited obligation bonds will provide capital for the Solvency Reserve Fund. Legislation establishing the fund has already been passed by the N.C. House, and I expect approval soon by the N.C. Senate,” Folwell said. “Once it is passed, it will be the first step in reducing the state’s $50 billion in unfunded health care and pension liabilities.”