WASHINGTON - District of Columbia officials are continuing to lay the groundwork for a possible refunding even though the deputy mayor for finance said the deal is looking less attractive because market rates are higher than last month.

"We're watching the market day by day," said Deputy Mayor Ellen M. O'Connor. "But the bond market rates have been zooming around lately, and the estimate of savings from a refinancing is substantially smaller."

Ms. O'Connor did not say what savings would now be possible, but in mid-august she had estimated that the city could save $9 million on a present-value basis from a $250 million refunding.

Ms. O'Connor on Monday said the city's goal is to save money by getting a better interest rate.

"This would be a rate-driven refunding," she explained, suggesting that the city will not come to market if interest rates are unfavorable. "We would not be paying off outstanding bonds early, nor would we be stretching out our repayment. it's like when you refinance your mortgage to take advantage of lower interest rates."

Although the market currently appears unfavorable, the deputy mayor said officials are preparing the necessary financial information and prospectus so the city can proceed when rates are favorable.

"We're preserving our options," she said.

District officials will also be studying responses to their request for proposals on a $75 million, 20-year certificate of participation financing. The COP deal would be the city's first.

Ms. O'Connor said she expected officials to examine the proposals over the next week and a half before announcing the winning team.

The COP deal will help the city buy land underlying an office building owned and managed by the district. The building, which will house various district departments and agencies beginning at the end of the year, was purchased by the city in March for $70 million.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.