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Berry bond interest rates going up

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Development Authority of Floyd County June 13 meeting

The Development Authority of Floyd County approved an amendment to a bond agreement with Berry College Wednesday, effectively increasing interest rates on the bonds. Authority members Jeff Kehl (from left), Larry Morrow, Berry's Brad Reeder and Authority Chairman Charles Stephens listen to an explanation of the amendment from attorney Scott Smith. / Doug Walker

The changes to the bond agreement were necessitated by the new Trump administration tax law which altered corporate tax rates. The interest rate for the bonds is tied directly to the tax rates.

"Basically what we're doing is making the bond holders whole," said Berry's Brad Reeder. "This does not help Berry College. It costs us more on an annual basis."

Reeder explained that the new interest rate is tied to the LIBOR, or London Interbank Offered Rate, which is a benchmark rate that some of the world’s leading banks charge each other for short-term loans. He told the authority members the rate fluctuates daily.

The projects included in the consolidated package include money for the Cage Center athletic complex, the Deerfield and Morgan residence halls, McAllister Hall and the general rehabilitation of other older residence halls.

Reeder said that when the bonds, which run through 2038, were consolidated in 2013, the principle amount added up to approximately $103 million dollars but now stand at approximately $96 million.

The only other item on the agenda for the special called meeting of the Authority resulted in the selection of Heritage First Bank President Ryan Earnest to serve as the secretary for the body.