Refinancing reduces school district’s payments by $1.2M
THREE RIVERS — The Board of Education of Three Rivers Community Schools announces the sale of its $9,630,000 2017 refunding bonds. The bonds are being issued for the purpose of refunding the school district’s 2007 refunding bonds and to pay the costs of issuing the bonds.
This refinancing reduces the school district’s payments $1,220,200 for the taxpayers and will occur through lower debt payments over the next 15 years.
In preparing to sell the 2017 bonds, the school district requested that Moody’s Investors Service evaluate the school district’s credit quality and assigned their underlying bond rating of “A1” to the bonds. Moody’s rating of A1 represents the fifth highest credit rating possible.
“The Board of Education should be commended for their fiscal responsibility. Due to the board’s fiscal management, the district received a sound credit rating which manifested into a competitive market for the purchasing of the bond,” said Superintendent Jean Logan.
The school district’s 2017 refunding bonds were sold at a true interest rate of 2.73 percent with a final maturity of 2032.
The next refunding opportunity will be the 2008 bonds. The current balance is approximately $12 million with a net interest cost of five percent. The district would be eligible to refund those at approximately the same time next year; pricing in January, with a close in early February. The level of savings/benefit of refunding will depend on the current interest rate climate at that time. The 2008 bond have a much shorter maturity of 2023 (vs. the 2032 that the 2007 bonds have).