Bernards Township Schools officials' decision to retire and resell about $25.8-million worth of previously resold bonds should save the district about $2.8 million over a 10-year period, the school district's business administrator reported on Monday night.
Schools Business Administrator Rod McLaughlin said the district, through its bond counsel, last week set a sale price for $25.79 million worth of bonds, carrying a 10-year life. Final closing on the deal is scheduled for Oct. 15, he said at Monday's meeting.
The resale of the bonds at a lower interest rate should translate into a savings for the district of between $280,000 to $284,000 each year for a decade, or at least $280,000 annually, McLaughlin said.
The bonds from earlier bond ordinances already had been repackaged and resold earlier in 2004, the district's bond adviser, Mary Lyons, reported at a previous meeting. However, interest rates had continued to decline since then.
As of earlier this month, the district had been expecting to save about $2 million. Bernards Township Schools officials decision to retire and resell about $25.8-million worth of previously resold bonds should save the district about $2.8 million over a 10-year period, the school district's business administrator reported on Monday night.
As of earlier this month, the district had been expecting to save about $2 million.
The bonds to be refunded before the new sale is completed were out on the market paying an interest rate of 4.46 percent, Lyons said at that meeting.
McLaughlin on Tuesday said he believed the interest rate on the new bonds was set at 2.27 percent.
The plan is to refund the higher-interest bonds, and close on the new bonds in October, Lyons said in September. But she said the interest rate on the new bonds would be set on the market during September.
McLaughlin said the new bonds had been marketed last Monday, Sept. 16.
This isn't the first time in the past year or so that the school district has replaced outstanding bond issuances with lower-interest borrowing through selling new bonds.
With regulations setting much of the timing, three piecemeal bond refinancing projects already have been approved in the past two years to sell new bonds to pay for the remaining outstanding balance of a $50-million-plus school construction referendum approved by township voters in 2005.
The final round of the refinancing for the schools construction, brought by Phoenix Advisors before the board last June, was expected to save more than $2 million in bond interest payments, on top of more than $3 million from earlier bond refinancing projects, Lyons said at that time.