School district seeks bids for possible refinancing of bonds

By Joel Stottrup

Union-Eagle Reporter

 

The Princeton School District might to save about $55,000 by refunding the district’s 2015-17 maturities of its $2.74 million in general-obligation school building refunding bonds, Series 2003.

The proposal is to run $1.8 million in general-obligation school building refunding bonds, taking advantage of lower interest rates. The existing bonds have interest rates of 3.7 to 4 percent. Ehlers, the school district’s financial consulting firm, is estimating that the new refunding bonds would have interest rates of 0.55 to 1.20 percent based on current market conditions.

The new bonds would have a three-year term and would be designated as bank-qualified because of the district issuing less than $10 million in the calendar year. That status broadens the market for the bonds, which can result in lower interest rates, according to Ehlers.

The district would award the sale of the bonds on Oct. 22 and could decide at that point whether to go ahead or abort the proposal. Business Manager Michelle Czech explained that the School Board can change its mind between now and the sale date if the interest rates jumped 5 points.

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