MSD locks in 3.692 bond interest rate

MSD Photo

MEEKER | Meeker School District RE-1 took advantage of historically low interest rates and sold tax exempt bonds on Jan. 16 with a true interest cost of 3.692 percent.

“We were very happy with our final interest rates, as the last few weeks leading up to pricing saw considerable volatility in global stock markets and confusion about the future direction of U.S. interest rates,” said Meeker School Superintendent Chris Selle. “These funds provide us with the money needed to start our high school project and hopefully to provide the matching funds needed to secure a grant the State of Colorado’s Building Excellent Schools Today (“BEST”) Program, which we will pursue aggressively this spring,” added Selle.

Working with bond underwriter George K. Baum & Company of Denver, Meeker RE-1 was able to lock in a true interest cost of 3.692 percent for the $28,000,000 bond issue. The low rates were supported by the State Intercept Rating of “Aa2” from Moody’s Investor Service and the use of bond insurance from Build America Mutual, which added a “AA” rating from Standard & Poor’s. “This allowed the school district to lock in very low interest rates, since a bond issue of this size might not have attracted interest from investors with just a single rating from one of the credit rating agencies,” said Todd Snidow, an executive vice president of George K. Baum & Company.

“We are delighted to have secured low financing costs and to get our construction project going before building costs skyrocket,” said Board of Education President Bud Ridings. “We are pleased to report to local taxpayers that the bond issue was well received by investors and we were able to do much better than the numbers approved by voters in the ballot question,” said Finance Director Janelle Urista. “This will serve us well if we need to sell more bonds later this year to complete our project in the event that we do not receive funding from the BEST program,” added Urista.  The 20 year bond issue was sold with a 10 year call feature, which will hopefully allow the district to pay off the bonds early, as directed by the Board of Education.

Special to the Herald Times