The Pawtucket City Council on Nov. 10 approved a resolution authorizing city actions and financing documents to refinance Redevelopment Agency revenue bonds issued for Phase 1A of the Tidewater Landing project. The council acted after a finance committee recommendation and an adviser presentation that described a refinancing opportunity expected to lower borrowing costs for the bond series.

A municipal adviser explained to the finance committee that the Tidewater bonds were originally issued at about a 7.5% interest rate and carried a complex structure tied to project revenues. Completion of the project and a state pledge to cover any shortfalls have raised the bonds to investment-grade, the adviser said, enabling a refunding that should reduce yields to under 5% and generate substantial present-value savings for taxpayers. "These bonds went from essentially being unrated to an investment grade rating of a double A minus likely," the adviser said at SEG 034–SEG 049, adding that refinancing could be achieved now and revisited when the bonds become callable in roughly eight years.

The adviser gave a present-value savings estimate in the range of $3.5 million to $4.0 million and said the refunding preserves the bonds' original term (a roughly 30-year amortization) rather than extending it. Transaction fees for the deal were estimated at about $600,000 in total across participants. The adviser also described a tender-offer approach to the refunding because there is a single bondholder at present, which simplifies the execution compared with a multi-holder public remarketing.

At the finance committee, a motion to return the resolution with a recommendation passed 3–0 (committee roll call recorded at SEG 189). The full council later took up the item and recorded a roll-call vote of 8–0 in favor. The council vote authorized city officers to execute the documents needed in connection with the refunding transaction.

The transaction does not convert the bonds to a general-obligation pledge of the city; advisers stressed these remain Pawtucket Redevelopment Agency (PRA) revenue bonds backed by the state step-in pledge and by revenues generated in the special district, not the city's general fund. The municipal adviser said the city and the PRA had coordinated with state officials and underwriters to structure the deal to capture state-level pricing while returning savings to the taxpayers who ultimately benefit from lower debt-service costs.

Council members asked whether the bonds could be refinanced again in the future; advisers said the structure preserves that option when the bonds are callable in about eight years and that any subsequent refinancing would follow standard market procedures. The transaction timeline, fees and the recommendation to authorize city staff to sign documents were the primary immediate outcomes of the council’s action.

What happens next: city officers are authorized to finalize and sign the financing documents needed to complete the tender-offer refunding. The council-approved resolution directs staff to proceed; the actual closing date will be set once the parties finalize the tender-offer terms and execute the required documents.

Sources: finance committee discussion and adviser presentation (transcript SEG 034–SEG 190, SEG 295–SEG 312).