Hoover council votes to refinance $72 million, potentially saving $5 million

The Hoover City Council today authorized the refinancing of $71.6 million worth of debt, likely saving the city more than $5 million in interest payments, investment bankers said.

The council, in a special called meeting, authorized The Frazer Lanier Co. to refinance $71.6 million worth of warrants the city originally sold in 2014 and 2016. The city has been paying 3.95% interest on the debt but should be able to get an interest rate between 1.82% and 1.85%, said Jason Grubbs, an investment banker with The Frazer Lanier Co.

The refinancing also will shorten the length of time it should take to pay off the debt by two years, with a new maturity date of 2035, said Lance Hyche, another investment banker with The Frazer Lanier Co.

The city is not borrowing any additional money with this move, Council President John Lyda said. Councilman Curt Posey added that the city was able to maintain its AAA credit rating, which enabled the city to get lower interest rates.

The Frazer Lanier Co. plans to close the sale of new warrants Tuesday, the investment bankers said.