Published on 28 June 2016
Devonport City Council last night approved a finance offer from ANZ Bank towards construction for Stage 1 of LIVING CITY.
Council will borrow up to $39M for Stage 1 of the project, as well as refinance its existing $21 loan portfolio with the ANZ BANK.
The re-financing of Council’s existing loans is expected to save Council more than $380,000 in 2016/17, as well as future interest costs, once a market adjustment fee of approximately $1.68M is recouped in around five years.
The new weighted average annual interest cost under the ANZ finance arrangement will be in the range of 3.0% to 3.2%, a significant improvement on Council’s current loans, which have interest rates ranging from 3.93% to 7.10%.
The ANZ financing will comprise a combination of fixed and variable facilities, with the LIVING CITY project funding payable over a thirty-year term and refinanced loans over a twenty years.
“Council has been able to take advantage of the current low interest rate environment in securing funding towards Stage 1 of LIVING CITY and refinancing its existing loans” said Acting Mayor, Alderman Annette Rockliff.
Council will provide security over a number of properties subject to development during Stage 1 to ANZ, in addition to a charge over rates, consistent with Council’s current finance arrangements with Tascorp.
Stage 1 of LIVING CITY is estimated to cost a maximum of $70.5M, with project funding made up of both Federal Government ($10M), State Government ($10.5M) and Council ($11M) contributions, and up to $39M in loan borrowings.
The project funding model demonstrates that Stage 1 of LIVING CITY is expected to generate sufficient new revenue to fund interest on the borrowings.