District 153 sold $8.2 million in general obligation bonds, and District 233 refunded $14.65 million in debt saving nearly $1 million through a lower interest rates.
Both districts were anxious to get into the market before the Federal Reserve issued minutes from its last meeting or made its anticipated move on interest rates that some believe could have a negative reaction in the markets.
“We’re still on the lower side of interest rates,” said Robert Lewis of PMA Securities, Inc. in his presentation to the District 233 school board Feb. 15. In January 2003, interest rates were around 4%. In 2020, the rate dropped as low as 1%. The district got a rate of 2.2% for its bond sale Feb. 15. Bonds will be repaid by December 2029.
John Gibson, chief school business official for the Homewood schools, said BMO Harris bought the District 153 bond Feb. 15 at an interest rate of 2.36%. The bonds will be paid off in 11 years.
At the District 153 school board meeting Monday, Feb. 14, the board gave its final approval to sell the bonds for improvements at Willow, Churchill and James Hart Schools.
A major portion of the work is improving air quality by replacing all the room units – 75 to 80 – at a cost of $4.2 million. The district will be using $1.2 million in federal Coronavirus Aid, Relief and Economic Security (CARES) Act money to cover a portion of that expense.
The district will be building two classrooms onto Churchill School and adding a mobile unit at Willow School; replacing boilers at James Hart School and Willow School; improving insulation and reducing energy costs with new window coverings; and renovating school bathrooms.
District 233 debt from 2012 and 2013 totaled $14.65 million with an interest rate of 3.5%. It is refinancing the debt for a lower interest rate of 2.2%. Although the district has $14.65 million in debt, it was able to reduce that to $12.16 million by using money it had on hand in its debt service account. The money enabled the district to make an interest payment now rather than including it as part of the debt package and making its interest payment later in the year, Lewis said.
The bonds are underwritten by Thornburg Asset Management and Allspring Funds Management LLC.