DOBSON — The Surry County Board of Commissioners gave the final go-ahead Monday night for Northern Hospital to refinance three bonds to take advantage of lower interest rates.
The move, hospital administrators say, will save the hospital millions in interest payments over the life of the bonds.
During a brief presentation to the board, hospital CEO Bill James noted that he was before the board last month to set the plans in motion, and said he had “good news.”
“Since that time, the North Carolina Local Government Commission reviewed the proposal and issued their approval,” he said, noting that the final step was to get approval from the local board.
During last month’s meeting, James said the hospital has three outstanding bonds, one secured in 1999 for $14.4 million, a bond received in 2001 for $6.8 million and a 2008 bond for just under $15 million.
The bonds being refinanced represents about 45 percent of the hospital’s total debt, according to James.
In a letter explaining the need to refinance the bonds, James said the proposed plan can eliminate some of the hospital’s debt while saving money simultaneously.
“The proposed plan of refunding is for the (hospital) to issue two separate series of revenue refunding bonds for the purpose of a) refunding and redeeming approximately $9,940,000 of the outstanding… 1999 bonds and b) refunding and redeeming all of the outstanding… 2001 bonds,” he wrote.
Once the new bonds are secured, the hospital plans to pay off the 1999 and 2001 debt, resulting in lower interest payments on the new debt.
Over the course of the life of the bond, the hospital is expected to save $2.3 million in interest payments, or 12.5 percent of the total debt.