Clarendon Hills saves money by refinancing debt

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Updated: March 17, 2012 8:11AM

Clarendon Hills will save $217,000 over 13 years by refinancing about $2.4 million in outstanding debt, a move approved Feb. 6 by the Village Board.

The debt being refinanced was issued in 2002 to purchase fire safety equipment and in 2005 to fund the construction of the new police station, said Peg Hartnett, finance director for Clarendon Hills.

Hartnett said the 2002 debt and a portion of the 2005 debt were combined for the refinancing.

The new debt certificates, which take effect Jan. 1, 2013, will mature in 2025 and will be paid through the village’s capital fund, as was the case for the 2002 and 2005 debt issuances.

“The refinancing doesn’t extend the life of the debt,” Hartnett said. “All this refinancing does is save the village money. We’re always looking for possible ways to save money like this, but you can’t refinance all debt, and there are certain periods of time you have to refinance for debt that allows that.”

Initially, village officials expected a savings of $150,000 with the refinancing; however, favorable bond sale results resulted in a savings of $217,000, or about 9.5 percent of the $2.4 million total, Hartnett said. The savings reduces the debt payments by about $16,700 annually.

Hartnett said Clarendon Hills benefited from its high credit rating. The village maintains the highest rating possible, AA+, for this type of debt. In 2011, Clarendon Hills received Standard and Poor’s highest credit rating, earning a AAA for its fiscal management.