by Doug Ashbury
Northern News Services

NNSL (Dec 03/97) - New debt rules and low interest rates mean the City of Yellowknife will save at least $1.8 million in interest over the next seven years.

The savings will be realized through refinancing several GNWT debentures.

The four debt obligations cover land development, general capital, and utility fund debt. There are two debentures in the latter fund.

The four cover $15.6 million of the city's debt and span terms into 2003.

And the city is looking at refinancing two more GNWT debentures which could generate additional savings of about $425,000, finance director Robert Charpentier said Monday.

The debentures were refinanced through trust company Pacific and Western Corp. and Canadian Imperial Bank of Commerce.

The utility and land development fund debentures were refinanced through Pacific and Western in March while the general capital fund debentures were refinanced through CIBC in October.

Previously, the NWT's Cities Towns and Villages Act would not allow refinancing debentures with trust companies, Charpentier said.

Regulations on the changes are to be finalized this week, he added.

The four new debentures include:

UF100 for $2,125,822 saving $162,265 with average borrowing decreased to 5.95 per cent from 8.25 per cent.

UF101 for $4,754,382 saving $674,096 with average cost of borrowing decreased to 5.95 per cent from 8.67 per cent.

LF218 for $4,549,017 saving $254,859 with average borrowing decreased to 5.5 per cent from 7.75 per cent.

General capital debenture for $4,147,555 saving $732,039 with average borrowing decreased to 5.82 per cent from 8.62 per cent.

The city, in its annual budget draft book, is estimating total long-term debt by the end of 1997 at just over $25 million. In 1998, debt is predicted to rise to $26.4 million but through 2001 debt is expected to fall to $16.3 million.