Bond Refunding Saves Avondale School District Taxpayers $1.8 Million in Interest Costs
The Avondale School District Board of Education is proud to announce the successful sale of its 2017 Refunding Bonds in the amount of $15,880,000. The Bonds are being issued for the purpose of currently refunding a portion of the District’s outstanding 2007 Refunding Bonds and to pay the costs of issuing the Bonds. The 2017 Refunding Bonds reduce the Avondale School District interest expense over $1,762,454 for the taxpayers and will occur through lower debt payments over the next 12 years.
Avondale Schools
“The refunding reflects our focus on fiscal responsibility,” said Superintendent Dr. James Schwarz. “Our community has consistently invested in their schools by approving bond issues and this refunding validates we are being accountable to our tax payers by carefully managing our resources.”
In preparing to sell the 2017 Refunding Bonds, the District, working with their financial advisor, H.J. Umbaugh & Associates Certified Public Accountants, LLP, requested that Moody’s Investors Service, a division of The McGraw-Hill Companies, Inc. (“Moody’s”) evaluate the school district’s credit quality. Moody’s assigned the district the outstanding underlying rating of “Baa1.” The rating agency cited the Avondale School District’s large, stable and growing tax base, moderate socioeconomic characteristics and enhanced debt service payment required in program mechanics in their rational for rating the District at this level.
Avondale’s Assistant Superintendent for Financial Services, Frank E. Lams stated that “With the expert assistance of Jesse Nelson of H.J. Umbaugh & Associates and solid legal advice provided by Miller, Canfield, Paddock and Stone, we were able to complete this refinancing to not only save the Avondale community nearly $1.8 million dollars in future interest costs, but also position our future debt service requirements to allow for needed new financing to enhance district instructional programs and facility needs.”
This financing transaction was conducted by the Michigan investment banking office of the brokerage firm, Stifel, the financial advising firm, H.J. Umbaugh & Associates Certified Public Accountants, LLP and the law firm serving as bond counsel, Miller, Canfield, Paddock and Stone, P.L.C. The school district’s 2017 Refunding Bonds were sold at a true interest rate of 3.15% with a final maturity of 2029 (a repayment term of approximately 12 years).
Brenda Voutyras, Managing Director with Stifel states, “Avondale School District’s Bonds were well received by the bond market. We were able to take advantage of current interest rates that met the goals of the District and resulted in a nice savings that will be passed on to Avondale School District taxpayers.”
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