Genesee School District Refinances Bonds
The Genesee
Joint School District has decided to refinance the bonds from its 2007 bond
levy in order to take advantage of historically low interest rates. This bond refinancing will save the school district’s
taxpayers over $560,000 in interest cost on the bonds while shortening the
repayment term. The 2007 bonds were issued to finance the addition to the
high school including the auxiliary gym and additional secondary classrooms. District
officials chose to keep the bond payments the same and utilize the interest
cost savings to shorten the repayment term which maximizes taxpayer savings in
the long run.
The Genesee
Joint School District finalized the bond sale on January 10th,
locking in an interest cost of 2.65%. The District was paying an average
interest rate of 4.22% on the old bonds.
The District’s bond
underwriter, Eric Heringer from the Boise office of Piper Jaffray & Co.,
said that a major reason for the District being able to secure such low
interest rates was that it has done a great job managing its finances: “The District was awarded an “A+” bond rating
from Standard & Poor’s due to conservative financial management that has
resulted in healthy general fund reserves.
Bond investors are paying close attention to the financial stability of
entities that issue bonds as a result of high profile municipal bankruptcies
such as the City of Detroit. Without a
solid credit history and sound financial management, the bonds would not have
achieved such a high bond rating. A
lower bond rating would have resulted in higher interest rates and reduced savings
for the taxpayers of the District.” Mr.
Heringer went on to say “the District also has a very low debt burden and a
history of strong community support for public education, which are additional
positive credit factors.”
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