Successful competitive bond pricing for Cardiff School District will save taxpayers $365,000
Cardiff School District successfully priced $8 million in general obligation bonds through a competitive sale process on Jan. 16. The bonds were the second series of general obligation bonds under Measure GG, a $22 million bond authorization that was approved by voters in November 2016.
In a competitive sale, six underwriters submitted bids for the bonds. The winning underwriter was R.W. Baird, which led a syndicate of 20 separate underwriting firms. The winning true interest cost for the bonds was 3.586170 percent which was lower than originally projected and provide to voters in November 2016. The lower than expected borrowing rates will allow the district to repay principal earlier, further reducing interest expense for taxpayers.
The district has previously issued $14 million in general obligation bonds in March 2017. The total debt service for the combined Measure GG bonds is approximately $4.3 million lower than the original projection provided to voters at the time of the election. The district was able to lock in these lower interest rates through a combination of responsible bond structuring, strong credit profile, and excellent market timing.
During the bond issuance process, the District’s “AA+” rating was affirmed by Standard & Poor’s (S&P). The S&P rating report cited the district’s “track record of very strong available fund balance reserves,” as well as, the “very strong local economy.” The “AA+” rating places the district among the top 5 percent of school districts in California.
Despite recent market volatility, the district was able to price in a relatively strong interest rate environment. On Nov. 6, municipal bond rates hit a recent high of 3.46 percent for a 30-year bond. On the day of pricing, the borrowing rate on a 30-year bond had decreased to 3.03 percent, saving taxpayers about $365,000.
Superintendent Jill Vinson said, “We are thrilled with the pricing results of the Measure GG bonds. We are tremendously appreciative of the support and trust that the community has placed with the school district. It has been a priority for us to implement this bond program responsibly and effectively.”
— Submitted news release
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