The Valley Home Joint School District priced refunding bonds on Sept. 6, locking in property taxpayer savings of $1,033,976 over time. Interest rates were at near historic lows, which allowed for the refinancing opportunity, said District officials.
The prior bonds that were refunded by the current issue were issued in 2004 in a higher interest rate environment. Interest rates on the prior bonds averaged 5.76 percent. The true interest cost on the newly issued refunding bonds were 3.45 percent. The differential in borrowing costs allowed the District to generate savings for local property taxpayers.
As part of the financing, the District also reduced the repayment term on the bonds, meaning that the bonds will be repaid earlier than previously scheduled. The District was able to shorten the repayment term of the bonds while still realizing savings in every year.
“We appreciative the support that our community provides to our local schools,” said Valley Home Superintendent Tom Price. “We wanted to make sure that the savings that are generated by the refunding entirely and directly benefit our District taxpayers.”
As part of the financing, the District received an upgrade from Standard & Poor’s on its general obligation bonds to “A+,” based on the District’s good management, strong finances, and stable local economy. The “A+” rating on the District bonds allowed the District to attain the lower borrowing rates to lock in savings for taxpayers.
“We are very pleased that we were able to lock in interest rates in one of the best markets for bond issuers,” said Board President Shanna Springer.
Property owners in the District will see a reduced property tax rate on future tax bills