The Dearborn Board of Education took action at the February 13, 2017 meeting that will result in long-term savings of more than $3.6 million for Dearborn taxpayers.
Working with their financial advisors and bond counsel, the District was successful in the sale of its 2017 Refunding Bonds in the amount of $45,520,000. The Bonds are being issued for the purpose of currently refunding a portion of the School District’s outstanding 2007 Refunding Bonds and to pay the costs of issuing the Bonds. The 2017 Refunding Bonds reduce the School District interest expense over $5,168,313 for the taxpayers and will occur through lower debt payments over the next 6 years.
“This is not the first time the District has taken these actions to save the taxpayer dollars. These bonds were part of the $150 million bond proposal passed by voters in 2003. The Bonds were refinanced in 2007 to lower the interest rate and now again to save even more in interest over the life of the bonds,” commented Mr. Tom Wall, Executive Director of Business Services.
In preparing to sell the 2017 Refunding Bonds the School District, working with their financial advisor, PFM Financial Advisors LLC, requested that Moody's Investors Service, a division of The McGraw-Hill Companies, Inc. (“Moody’s”) evaluates the School District's credit quality. Moody's assigned the School District the outstanding underlying rating of "A1". The rating agency cited the School District's sizable tax base, growing student enrollment, strengthening reserves and moderate debt burden in their rational for rating of the School District at this level.
The School District's financing was conducted by the Michigan investment banking office of the brokerage firm, Stifel, the financial advising firm, PFM Financial Advisors LLC and the law firm serving as bond counsel, Thrun Law Firm, P.C. The School District's 2017 Refunding Bonds were sold at a true interest rate of 1.82% with a final maturity of 2022 (a repayment term of approximately 6 years).
Brenda Voutyras, Managing Director with Stifel states, "Dearborn Public Schools Bonds were well received by the bond market. We were able to take advantage of current low interest rates that met the goals of the District and resulted in a nice savings that will be passed on to the District's Taxpayers."