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PEC restructures debt, looks to save an estimated $101 million over next 30 years
7/16/2012 5:06:07 PM
Pedernales Electric Cooperative announced during its regular July 16 Board meeting that it had restructured $230 million worth of debt in a move that could save the Cooperative an estimated $101 million over the next 30 years.
PEC’s Chief Financial Officer Frank Skube reported to the Board of Directors that the debt was switched from an interest-only loan to one with level principal and interest payments in a move to lock in current low rates and protect the Co-op against potential interest rate increases.
PEC’s District 7 Director Dr. Patrick Cox and Skube noted that the lender, the National Rural Utilities Cooperative Finance Corporation (CFC), worked with PEC members’ best interests in mind. CFC is a nonprofit cooperative that provides financial lending services to electric co-ops across the U.S.
“CFC was under no obligation to refinance,” Skube said. “But they’re a cooperative just like us and take to heart the cooperative principles of working together to find solutions in everyone’s best interest.”
The debt was incurred to fund expansion of lines and facilities between 2008 and 2010, during a period of tremendous growth.
The next regular Board meeting will be held at 10 a.m. on Aug. 20 at PEC’s E. Babe Smith Headquarters Building in Johnson City.