The Liberty County Development Authority held a called meeting Tuesday to approve a resolution to restructure bond debt.
Despite a slight delay in assembling a quorum of voting board members, the meeting proceeded swiftly and the resolution passed unanimously.
The restructured bonds include a $7.2 million balloon payment that was coming due in July 2018, as well as a $9.3 million bond, originally due in 2026. The bonds all stem from debt incurred from improvements to Tradeports East and West and the water-reclamation facility.
According to LCDA finance director Carmen Cole, restructuring became necessary when SunTrust, the Authority’s financing partner and original bond holder, sold the bonds to Nuveen Investments Inc.
James Hargrove, principal with PRISM Municipal Advisors, said that although SunTrust would have worked with the authority in 2018 to refinance the $7.2 million bond, Nuveen would not.
“Not having a financing partner really in place — you could argue, I guess, that Nuveen is that new partner — but they’re not a partner. They’re a sophisticated institutional investor who will want their money back in July of 2018,” Hargrove said via conference call.
He said that Nuveen was agreeable to a new bond issue of $16.5 million at a 5.5 percent interest rate, with semiannual payments due every January and July through 2036.
The restructured bond also includes a waiver of the pledge of the authority’s real estate as collateral, which was a requirement of SunTrust and “not typical in traditional municipal financings,” according to Hargrove.
The newly-refinanced, long-term bonds also will afford the authority more flexibility in dealing with a $4.2 million Hugo Boss bond, which is due in 2018.
Hargrove informed the board that the new bonds include a call date of July 2021, at which time the remaining bonds may be refinanced or paid off.