Dublin Town Council unanimously voted Thursday night to refinance its municipal center loan, saving nearly $70,000 in the process.
Kyle Laux with Davenport & Company in Richmond said PNC Governmental Finance has agreed to refinance the $730,266 remaining on the town’s 1996 municipal center loan of $1.4 million.
The refinancing will reduce the interest rate of 5.04 percent to 2.25 percent for the first seven years of the 12 years remaining on the loan. At that point, the town could finance a “balloon” maturity of about $330,000 for an additional fixed rate through PNC or another bank, or pay off the loan. The loan can be paid off at any time without penalty.
Laux said the interest rate would have to increase to 11 percent for the last five years to “negate the savings” realized through the refinancing. Even if the rate doubles, he noted, the town’s savings still would be $67,000.
Dublin also is looking into refinancing its 2006 Rural Development loan for the water system. Just over $2.2 million is remaining on the $5.2 million loan. The current interest rate is 4.38 percent.