MDOT Refunds Bonds, Saves Taxpayers Millions
BATESVILLE, MS The Mississippi Department of Transportation (MDOT) recently refunded H.E.L.P (Highway Enhancement through Local Partnerships) bonds for Marshall County on the Interstate 269 project saving the taxpayers of Mississippi $3,844,769, according to Transportation Commissioner Mike Tagert.
Refunding is the financial practice of refinancing governmental bonds; similar to when individuals refinance their homes. Bond refunding is used to achieve savings on interest costs.
"The refunding of these bonds shows that diligence and timing are everything," Tagert said. "The bonds were scheduled to be sold in January, but a post-presidential election interest rate spike delayed the sale and made potential future refunding uncertain."
As interest rates began falling in late spring, MDOT staff restarted efforts to move forward with the transaction to refund the bonds. MDOT priced the transaction and took advantage of historically low tax-exempt rates and increased investor demand for tax-exempt bonds.
"Over the life of the bonds, Mississippians will see real savings for today and tomorrow," Tagert said. "This $3.8 million in savings will equate to additional transportation construction projects that would not have been possible otherwise."
Construction of the Interstate 269 project is on schedule in north Mississippi. This is the largest active MDOT construction project in the state. Dirt and bridgework for the entire Interstate 269 corridor is complete and crews are currently working on completing paving for the project. MDOT expects Interstate 269 to be open for traffic in fall 2018. The first section of Interstate 269, from State Route 302 to the Tennessee state line in Marshall County, was opened to traffic on October 23, 2015.
"This is a great example of how MDOT is working to be good stewards of taxpayer dollars," Tagert said. "By having knowledgeable staff, the agency was equipped to take advantage of market values and save the taxpayers of Mississippi millions of dollars."