MPC bonds refinanced -- with savings attached

It took a few months for the paperwork to go through, but Monterey Peninsula College district administrators finally re-financed a $28 million bond in a deal that will save taxpayers nearly $1.4 million.

The bond is part of Measure I, the $145 million in bonds approved in 2002 to build MPC 's Marina center and rebuild the Monterey campus. 

MPC administrators began the process earlier this year, and were able to reduce the interest rate of the bond from 4.9 percent to 1.69 percent a year.

The bond refinanced is not a "capital appreciation bond," which became infamous last year after media reports publicized that Poway Unified School District in San Diego County will end up paying $1 billion in interest on $105 million in capital appreciation bonds that will mature in 22 to 40 years.

Two weeks ago, the California State Assembly approved a bill that would limit the duration of capital-appreciation bonds to 25 years, prohibit debt payments of more than four times the principal and mandate the option of early repayment on deals that mature in more than 10 years. 

MPC will not receive any part of the savings. However, taxpayers living in the MPC district boundaries will see their tax rates reduced as a result of this transaction.