Port of Tacoma bond to save $19.2 million over 30 years
The Port of Tacoma will save an estimated $19.2 million over the life of its Series 2006 $100 million, 30-year variable rate revenue bond offering. The port structured the bond offering with a forward-starting payment agreement, locking in an interest rate of 3.795 percent, exceeding the port’s finance plan objective of 5 percent.
According to Jeff Smith, senior director of finance and administration, the low interest rate will save the port about $1 million per year over the first five years of the bond issue, freeing additional financial capacity for the port’s capital development plans for infrastructure and facilities.
The port received bids from two underwriters, with the lowest — Morgan Stanley — offering an interest rate of 3.795 percent. The interest rate includes insurance costs. Lehman Brothers matched the interest rate, and will receive 30 percent of the contract.
At its July 21 meeting, the Port of Tacoma Commission approved the 2006 $100 million bond offering. Tacoma handled $29 billion in annual trade and 1.8 million TEUs in 2004.