Newspaper article THE JOURNAL RECORD

Oklahoma Turnpike Authority to Refinance $700M in Bonds

Newspaper article THE JOURNAL RECORD

Oklahoma Turnpike Authority to Refinance $700M in Bonds

Article excerpt

The Oklahoma Turnpike Authority voted Monday to get its paperwork in order to refinance nearly $700 million in bonds, a move that could save the agency millions of dollars in interest if market conditions allow.

Now, the savings are not quite there, said Phil Tomlinson, director of the authority. It depends on what the market does. It could be several months before the bonds are actually issued, Tomlinson said.

The state Council of Bond Oversight is scheduled to review the bond issue on Thursday.

Interest rates were exceptionally low last summer, when the authority started its effort to refinance certain bonds issued in 1998 and 1992 to finance construction work. Refinancing the bonds at the opportune time could save the authority anywhere between $25 million and $40 million, said Wendy Smith, finance director for the authority.

And we didn't go any further than the original terms, Smith said. We were originally supposed to pay off Jan. 1, 2028, and we still are. Though the authority plans to refinance only about $680 million, at Monday's meeting members authorized the issuance of up to $750 million in bonds if necessary.

During the 2006 legislative session, the Oklahoma Legislature passed and Gov. Brad Henry signed into law House Bill 2474, which clarified the authority's ability to issue bonds for the purpose of hedging interest rate risk, provided the transaction is approved by the Oklahoma State Bond Advisor and Council of Bond Oversight.

The authority has faced legal challenges to some of its bond issues in the past. State Sen. Cal Hobson, D-Lexington, who co- authored HB 2474 with state Rep. Fred Perry, R-Tulsa, said a recent opinion from the Oklahoma attorney general had left some questions unanswered as to whether the authority needs to get legislative approval before issuing bonds. HB 2474 makes clear the agency's authority to act without the approval of the Oklahoma Legislature. …

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