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Jul 11

Port of Palm Beach Refinances Debt, Saves $615,000

Posted on July 11, 2016 at 4:21 PM by Tara Monks

refinancing signingOn Wednesday, July 6, 2016, the Port of Palm Beach finalized the refunding of their 2005 Revenue Refunding Bond, holding a special meeting with the Port Commission to approve and sign an agreement with Regions Bank. The refinance of the loan with Regions Bank will result in cash savings of approximately $615,000.

On July 1, 2005, the Port of Palm Beach issued Revenue Refunding Bonds in the amount of $13,090,043.70, at an interest rate slightly over 4%. These bonds were callable at any time, without a premium, on or after September 1, 2015 for maturities on or after September 1, 2016. As of September 1, 2016, the bonds will have an outstanding principal and accrued interest balance of approximately
$9.9 million. Regions Bank offered the most favorable terms to the port, including a fixed interest rate of 1.85% for the term of the loan. The loan will be in the form of a bond with the same maturity as the 2005 Revenue Refunding Bonds (September 1, 2015).

richards signing“It is with great pleasure that the port accepts these terms,” explains Port of Palm Beach Chairman Wayne M. Richards. “Through the work of our Chief Financial Officer Paul Zielinski and Financial Advisor Clark Bennett, the port was able to reduce debt service payments by more than $600,000 over the term of the loan.”

He continues, “I do not fail to recognize that these bids to refinance were due one week after Fitch Ratings revised the Rating Outlook from Stable to Positive. This timing undoubtedly assisted us in receiving the most favorable proposals possible.”

On May 27, 2016, Fitch Ratings released a report documenting the port’s continued improvement in debt service coverage ratios and robust liquidity position of over 300 days cash in hand since 2010. The report also noted the organization’s restructuring of the operating profile since the recession as a reason behind the upgrade. Present during the special meeting to sign documents finalizing the refinancing agreement were Port of Palm Beach Chairman Wayne M. Richards, Vice-Chair Jean Enright and Secretary George Mastics.