From the Denver Business Journal (Cathy Proctor):
The utility said the bonds were sold at an interest rate of 5.51 percent a year. Through the Build America Bonds program, part of the American Recovery and Reinvestment Act, the federal government will reimburse 35 percent of the bond’s interest cost. That subsidy brings the net interest on the bonds down to 3.62 percent, the utility said.
The bond money will pay for initial construction of a raw-water pipeline, a treated-water pipeline, a connection to the Pueblo Reservoir dam, land and engineering work on pump stations and a treatment plant, the utility said…
“Interest rates on 40-year bonds are at historic lows,” said Bill Cherrier, Colorado Springs Utilities chief planning and finance officer, in a statement. “This is an opportune time to build SDS. Contracted construction costs are less than we projected, and there is a strong pool of highly qualified contractors available and eager to work on the project.”
More coverage from Daniel Chacón writing for The Colorado Springs Gazette. From the article:
The interest rate on the so-called Build America Bonds is 5.51 percent, but since the federal government reimburses 35 percent of the interest cost on those bonds, the net interest rate is 3.62 percent, according to the municipally owned utility. “By executing this strategy, Colorado Springs Utilities estimates it will realize total savings in interest expense of $31.5 million over the life of the bonds,” Utilities said today.