Due to low interest rates, the state of Tennessee is going to save over $37M in the coming years.  With the economy beginning to recover, today is the time to look at refinancing.  Just as someone with a mortgage knows, if you have the ability to lower your interest rate to save money, you do it.  That is what the state did with this bond sale.

On Wednesday, the State of Tennessee sold 0ver $449 million of General Obligation Refunding Bonds. The goal of this refinancing was to achieve debt service savings over the life of the debt equal to four percent of the present value of the refunded bonds. The State surpassed this goal, achieving 7.46 percent present value savings totaling more than $34 million.

My colleagues and I, through strict fiscal policy, put Tennessee on a path to receive these funds.  With this refinancing, the total savings generated this fiscal year are $37,319,500.  The savings will expand over 15 years and for fiscal year 2012, the savings will reach over $5 million.  With this money Tennessee could possibly look at offsetting cuts to vital areas of government. 

Last year the state sold bonds over $3 million, in which the state saved $500,000.  Keeping Tennessee on this trail of saving money is one my highest priorities. 

All the bonds were rated Aaa, AA+, AAA and it was the third largest deal this week in the nation.  Over $100 million in orders were taken from retail customers with Tennessee retail customers receiving the highest priority.

If you have an issue you’d like to address, please don’t hesitate to contact me. My telephone number is 741-1980, and email address is This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

Rep. Mike McDonald (D-Portland) serves the 44th District in the Tennessee House of Representatives.