Treasurer Kennedy Says Low Interest Rates Contribute to Savings

BATON ROUGE – The state could save close to half a million dollars a year by refinancing general obligation state bonds at a lower interest rate, according to State Treasurer John Kennedy.

When interest rates began to drop this past month, homeowners across the nation began to refinance their home loans to save money, said Treasurer Kennedy. In a way, that’s what the state will be doing when we refinance bonds. Were simply taking advantage of falling interest rates to lower the payments on state debt.

The state is looking at refinancing the 1995A bond issue and will look at refinancing other outstanding bond issues. It is anticipated that the bond issue amount will be around $125 million. The average interest rate on these bonds is 6 percent, but rates could drop as low as 3.3 percent later this year.

Refinancing these bonds will save the state about $500,000 a year, or over $7 million over the life of the bonds, said Treasurer Kennedy. Our goal is to do this as soon as possible so that the state and its taxpayers can start benefiting immediately.

Contact:
Sarah Mulhearn, Communication Director
(225) 342-0012