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Sevier County moves to terminate interest rate swap agreements citing favorable market conditions
Summary
County financial staff recommended terminating certain interest rate swap agreements now because early-termination fees are low; the commission approved the action, noting an estimated but not final cost of about $400,000 to cash out the swaps.
Sevier County commissioners approved Resolution 2023-03-04 to terminate certain interest rate swap agreements held by the Public Building Authority, a move the county's presenter said is driven by a historically low early-termination fee in the market.
Joe Ayers told the commission that London Interbank currently holds the bonds and that now would be the best time to cash out because the early-termination fee is at an "all time low." Ayers added the county's current estimate to cash out is approximately $400,000 but said that figure is not fully confirmed because market fluctuations could change the final cost.
The motion to proceed was made by Gary Cole and seconded by Mike Chambers; the resolution passed by roll call vote 24 yes, 1 absent. The commission record does not include a more detailed cost breakdown, alternatives considered, or a staff memo in the meeting transcript; staff follow-up and finalized numbers will be required to implement the termination.
The action authorizes the county to pursue termination under the terms of the relevant swap agreements; the transcript does not record subsequent operational steps or a firm settlement amount.
