Refinancing bonds saves Issaquah School District $3.9 million
July 31, 2012
By Lillian O'Rorke
With the lowest interest rates in 40 years, the Issaquah School District saved nearly $4 million July 24 when it refinanced $41.73 million of bonds originally sold in 2006.
The district also sold $55 million worth of new bonds that day.
“The sale went as good as we could have expected it,” said Jake Kuper, the district’s chief of Finance and Operations. “Not only is it a good time to build but it’s a good time to borrow, so it’s a double bonus.”
Kuper, Superintendent Steve Rasmussen and school board members Marnie Maraldo, Anne Moore and Suzanne Weaver attended the 6:45 a.m. sale of the bonds at Seattle-Northwest Securities, which assisted in the sale. Refinancing the nearly $42 million of old bonds meant the interest rate when down from 5 percent to 1.89 percent, meaning that $3.9 million will be saved over the next 10 years.
“This is a direct savings to our community members in the form of taxes they expected, but will not have to pay,” Rasmussen said.
The new bonds are part of the $219.2 million bond measure approved earlier this year. That $55 million has a true interest cost or real cost of 2.87 percent. And they will be eligible for refinancing in 2022. A sub-3 percent rate, explained Trevor Carlson, of Seattle-Northwest, is a very attractive place to be.
The proceeds from the sale will go toward construction projects at the front of the district’s eight-year building plan, including Liberty High School’s Phase 2 and improvements to Skyline High School’s stadium.