Refinancing of initial NCORPE bonds results in $13+ million interest savings
Refinancing of the original bonds sold to finance the land purchase and development for the Lincoln County augmentation project will save more than $13 million over the next 21 years.
The bond sale for the new bonds, which totalled $86 million, was completed March 22.
Board members of the Nebraska Cooperative Republican Platte Enhancement Project (NCORPE) voted last summer to refinance the bonds, hopefully before the presidential election.
The bond sale would only be completed if the refinancing could save at least $10 million.
Conditions in the bond market turned favorable last month for the bond sale. NCORPE will realize an interest savings of $13.2 million over the life of the bonds.
The original bonds were sold in 2013 at an average interest rate of 5.2 percent.
The average interest rate of the new bonds came in at 3.7 percent.
The $13.2 million in savings represents a reduction of 11 percent in the amount of debt to be repaid by NCORPE through 2038.
The bonds issued by NCORPE are paid from revenues from four separate bonds issued by each of the natural resources districts (NRDs) that comprise NCORPE. These NRDs include the Upper Republican, Middle Republican, Lower Republican and Twin Platte NRDs.
The principal and interest on the NRD bonds are paid by the occupation tax on irrigated land.
NCORPE had a better AA bond rating for the new issue compared to an A1 rating for the first issue.
The rating improved with four years of payment history on the initial issue.
The NCORPE augmentation project enhances Republican River stream flow when needed to comply with the Republican River Compact.
Construction has begun on the north pipeline that will increase Platte River flows to aid Twin Platte NRD’s efforts to meet obligations in its integrated management plan.
They need to restore pumping back to 1998 levels and augmentation will aid in that effort.