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More than three years after the idea was first floated by former Mayor Dick Murphy, the city of San Diego today completed the refinancing of its ballpark bonds. The city says it will save $3.7 million annually over 25 years because it was able to lower the interest rates that were originally driven up by a crush of litigation facing the Petco Park project.
The city had put off the refinancing for a number of years because of the loss of its credit rating and its banishment from Wall Street. However, with its 2003 audit still unreleased and its credit rating still suspended, the city chose to refinance the bonds on the private market directly with Bank of America.
The savings is higher than the original forecast of $3.3 million a year. However, had the refinancing taken place in the public markets, city staff estimates it would have saved $4.1 million a year. The city has the option to refinance the bonds again on the public market when it squares up its credit issues.
In a release, the Mayor’s Office called the refinancing a “new plan” that would save the city $93 million. That is the gross savings. The net savings, which take into account inflation, is $51.6 million over the life of the bonds.