The county plans to reissue the bonds originally sold in 2006 at an interest rate of 4.83 percent. (Photo by Kevin Beese/for Chronicle Media)

Cook County will reissue $330 million in bonds in an effort to save taxpayers an estimated $27 million.

The county plans to reissue the bonds originally sold in 2006 at an interest rate of 4.83 percent. Ivan Samstein, the county’s chief financial officer, expects the government entity to be able to sell the bonds at interest rates close to 3.9 percent. The nearly 1-point interest rate reduction would save the county around $27 million in interest over the 10- or 12-year life of the bonds, he said.

“I would point out that those aren’t savings in this budget year or immediate, but they happen over a multi-year period in that they reduce interest costs over that multi-year period,” Samstein said.

Commissioner Richard Boykin was the only County Board member to vote against the proposal when it was considered by the board’s Finance Committee last week. Boykin said he could not support the action when the syndicate of financial firms used as bond agents for the refinancing included J.P. Morgan Securities, part of J.P. Morgan Chase, which recently settled a lawsuit regarding predatory lending practices.

“I don’t think taxpayers ought to be rewarding banks that have been found guilty or have settled suits relative to predatory lending,” Boykin said. “These banks cost the black community, the Latino community generations of wealth, just wiped out overnight, because of their callous actions of predatory lending.

“(They were) preying on people who they knew couldn’t pay these loans back, these mortgages back, and that’s what this does. This rewards them for that action because they’re part of this deal and they’re getting paid by taxpayer dollars as a result on it.”

Boykin also balked at Barclay’s Bank, based in London, heading up the syndicate of banks. He believed a Cook County bank or at least a financial institution in Illinois could have been chosen to head the refinancing effort.

Samstein said in order for the broadest distribution of bonds possible, a larger, multinational institution is normally chosen. He said there are local firms, such as Bernardi Securities, and local minority firms, such as Loop Capital and Cabrera Capital, involved in the refinancing effort.

He noted that many of the financial entities involved in the refinancing are minority- or women-owned.

Commissioner Larry Suffredin noted that regardless of commissioners’ view on county debt, backing the refinancing made sense because it simply lowers the interest on debt the county already has.

“Even if you believe that we shouldn’t borrow any more money — and I know that there are commissioners who feel strongly about that — this is not borrowing more money,” Suffredin said. “This is refinancing our existing debt. Even if you didn’t vote for that before, this is a prudent thing to do to save us money over a period of time.”

Samstein noted that the bond money will not be used for the new county hospital campus or any other capital improvements. It is just a measure to reduce interest payments, he said.

The county’s chief financial officer estimated that the underwriting cost for the bond issuance would be close to 0.3 percent, meaning the banks involved would split about $1 million. Samstein said lawyer fees for the bond sale would range from $90,000 to the top firm in the project to $24,000 for lesser players in the effort.

He said he expects all costs of the bond issue to be about 0.6 percent, when just for underwriting alone the industry standard is 0.5 percent.

“We expect total cost of issuance to be extraordinarily low on this transaction,” Samstein said. “… That is a significant lower fee than you see market-wide.”

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