On Thursday, the Huron Board of Education closed the process of the partial crossover advance refunding of the District’s 2013 General Obligation Bonds outstanding in the amount of $8,795,000 to take advantage of currently low interest rates.
Superintendent Terry Nebelsick says the work of Huron School District Business Manager Kelly Christopherson will provide significant savings to local taxpayers.
The overall reduction in debt service from the crossover advance refunding totals $1,290,000 over the remaining term until the Bonds are paid in full on February 1, 2039. The true interest cost rate of the new crossover advance refunding Bond issue is 3.17%.
The Bonds that were crossover advance refunded had a true interest cost rate of 4.02%; the District’s rates were cut by 21%. The Bond sales were handled by Dougherty & Company LLC.
As a part of the refinancing process, the District received an “AA+” credit rating with a stable outlook from Standard & Poor’s Global Ratings (S&P) by utilizing the credit enhancement program administered by the South Dakota Health & Educational Facilities Authority.
The program is designed to intercept State Aid payments in the event the District fails to make the bond principal and interest payments as scheduled. The credit rating helps secure low interest rates.