New Haven School District saves over $188,000 with bond refinance

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New Haven School District Board President, Brenda Menke, signing the resolution documents.

Moments ago, at a regular meeting of the New Haven School District Board of Education, a refunding bond resolution was approved. 

It authorized the sale of $1,475,000 General Obligation Refunding Bonds with reoffered yields ranging from 0.40% to 1.90%, compared to the reoffered yields from 3.20% to 4.30% on the callable portion of the Series 2008 bonds used to additional classrooms at the elementary building and complete improvements at the District’s facilities. 

As a result, the district reduces the future interest expense by about $188,086.  The Series 2012 Refunding Bonds were underwritten on behalf of the District by L. J. Hart and Company and were offered to area institutional investors. 

According to Amanda Weis, Senior Analyst of L. J. Hart & Co., the Peoples Savings Bank purchased $750,000 of the refunding bonds and the Citizens Bank acquired $450,000 which was helpful to the success of the financing.

The Superintendent of Schools, Kyle Kruse, expressed enthusiasm and support for the refunding option selected by the Board of Education.  “This plan pushes the payment of principal forward in order to achieve the greatest interest savings and takes advantage of the lower interest rates currently available in the municipal bond market, while maintaining approximately the same total fiscal payments as the Series 2008 Bonds,” Kruse remarked.   

The Board President, Brenda Menke, pointed out that the $188,086 of interest savings for the Series 2012 refunding is not all the District may realize due to the Series 2012 Bonds having a call feature in 2016 at no penalty. 

Menke explained, “We are locking in these levels that are approximately 2.20% lower than they were in 2008.  The District’s municipal bond underwriter, L. J. Hart & Co. prepared the refunding proposal.  Ms. Weis explained how it can fit into the long range plans of the District and mentioned that the three significant factors making the Series 2012 refund possible were the lower interest rates than in 2008, a portion of the Series 2008 bond issue is callable on March 1, 2013 at no penalty, and the District’s ability to participate in the State of Missouri’s Direct Deposit Program.  This program makes it possible for the District to receive a “AA+” rating from Standard and Poor’s Corporation on the refunding bonds.”

The closing for the refunding bonds is to occur on December 18, 2012.  Several board members complimented Kruse and the L. J. Hart & Co. for developing the attractive refunding plan.  “It is nice to be able to save $188,086 of our taxpayers’ money,” commented Nadine Pruessner, Vice President of the Board of Education.