This is an archived article that was published on sltrib.com in 2015, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
The Utah Transit Authority figures it will save $77.7 million over the next 24 years, thanks to bond refinancing it just completed. The agency's credit rating has just been upgraded, too.
Bob Biles, UTA chief financial officer, said the agency sold new bonds to refund $831.6 million worth of old bonds issued in 2007, 2008 and 2012. Some of the original bonds had helped pay for building 70 miles of rail for extensions of the FrontRunner and TRAX train systems.
By lowering the interest that UTA is paying to an average 3.22 percent — down from a variety of higher rates — it will save $77.7 million through 2038, Biles said.
"Most of the savings will be in the next five to six years," he said.
When UTA started planning the refinancing last fall, its financial advisers figured that it might yield $58 million in savings. "The fact we got $77.7 million shows the market went our way," Biles said.
The bonds were issued in two pieces — $639.4 million in senior-lien bonds, and $192.2 million in subordinate-lien bonds. Standard & Poors upgraded its rating of UTA for those subordinate bonds from A to A-plus. Biles said that shows confidence in the work UTA has been doing to improve its long-term finances.
In 2011, Fitch Ratings downgraded UTA's rating for such bonds from AA-minus to A-plus, saying the agency's "debt profile is somewhat weak" because of relatively heavy debt where "rising debt service has been shrinking revenues available for operations" and could hurt operations unless sales taxes picked up significantly.