City hall takes advantage of COVID-19 depressed interest rates
LONDON, ONT. -- As financial markets struggle under the impacts of the COVID-19 pandemic, there’s a bright spot for London taxpayers.
City hall received a record-low interest rate of 1.673 per cent when it borrowed $36 million to ensure cash flow for a number of big capital construction projects.
Civic administration timed the debenture with the dip in the market caused by the pandemic.
“With the situation already going on with COVID, we are going to get better rates.” explains corporate services committee chair Arielle Kayabaga.
Compared to last year’s still impressive 2.66 per cent interest rate, city hall will save about $2 million over the 10-year repayment period of this year’s debenture.
For almost four decades London has held a triple-A credit rating, which also made it a safer place for lenders to invest money during a period of financial uncertainty.
“All of these things support this type of result,” explains councillor Josh Morgan, “For us to be able to access the debt to complete the projects we need to complete at a rate that is pretty incredible.”