The City of Newport News Waterworks Department serves not only Newport News but also other area cities and counties. Many of the facilities are funded by bonds which are paid back by funds from the system revenues. Due to favorable market conditions, on Tuesday, April 19th, the City was able to refund $29,825,000 of Waterworks Water Revenue Bonds to refinance a portion of its existing capital debt.
The refunding was a great success, with the Waterworks Bonds generating good demand and high investor interest in the market. As a result, the refunding bonds were priced at an interest rate of 2.76% (True Interest Cost) and generated $6,589,885.29 of Net Present Value savings. This means that on a cash flow basis over the life of the bonds, Newport News Waterworks will save about $8.5 million over the life of the bonds. This is by far one of the best refundings on the savings rate the City has experienced in recent years.