Background
Since the outbreak began, the Maverick County Commissioners Court has issued several declarations related to the pandemic, including limiting the size of gatherings; allowing only essential businesses to operate; and instituting a curfew. Maverick County is an economically distressed community with an estimated poverty rate of 26.8% in 2019. The negative economic effects of the COVID-19 pandemic have placed additional stress on the community, primarily because of increased unemployment. At the end of 2019, the unemployment rate in the county was approximately 7.5%. Following the coronavirus outbreak, the unemployment rate rose sharply to an estimated 21.4% in May 2020.
Description
The project consists of refinancing existing debt for Maverick County, Texas in the amount of US$17.75 million. The refinanced debt had a weighted average interest rate of 7% and would have cost the County approximately US$3.3 million in debt service payments over the next three years.
Objective
Refinancing is expected to reduce current debt service by roughly US$230,000 annually during the first three years of the NADB loan, providing cash flows for the maintenance and operation of existing infrastructure, as well as for the provision of public services. These savings will benefit county residents, as they will also give Maverick County more financial flexibility, lessening the need for fee or rate adjustments to support public services in the community.
