The online auction to sell the 2012 Refunding Bonds, held Wednesday, was very successful. The winning bidder, with an overall interest rate of 1.86%, was the investment bank Morgan Keegan/Raymond James. Interest rates have dropped somewhat since Council adopted the bond ordinance last month, but the low interest rate is also due to aggressive bidding on the competitive sale.
Eight firms submitted bids and all but one made multiple bids as the auction progressed. In total 31 bids were submitted. As a result, the bond sale will save the City $1,073,000 in debt service costs on a present-value basis. That is $443,000 greater than the savings projection provided to Council in July. The amount of actual savings as a percent of the debt issued significantly exceeds commonly-used industry guidelines.
Several options are available to individuals who wish to purchase these bonds or other bonds that the City has issued previously. They can contact Raymond James offices in Champaign-Urbana or another local security dealer. Several local banks sell securities, and local security dealers can be found by searching the Internet for “investment services in Champaign, IL.” The Yellow Pages lists securities dealers under “Investment Securities” or “Investment Advisory Services.”