Interest rates low for second bond sale
Last updated 10/23/2019 at 2:23pm | View PDF
Hinsdale High School District 86 plans to sell another set of bonds associated with the $139.1 million building project voters approved in April at a savings to taxpayers.
The school board voted unanimously earlier this month to approve the sale of $34.9 million in bonds. The district had planned to sell the bonds in late winter or early spring, Chief Financial Officer Josh Stephenson told board members at their Oct. 10 meeting.
“The recommendation from our municipal advisor was that interest rates were favorable at this point in time, so since we’re only accelerating a few months off our original schedule, it made sense to start the ball rolling, get everything in place,” Stephenson explained.
If everything proceeds according to schedule, the actual sale will take place in November.
“We can see what the market conditions are, and if interest rates are still in a favorable position, take advantage of that,” he said. “A slight change in interest rates can be hundreds of thousands of dollars in interest savings to the taxpayers.”
The district sold $70 million in bonds in July at a favorable interest rate of 2.964. The $27.8 million the district will pay back in interest is $4.5 million less than anticipated.
Before discussing the bond sale at the meeting, board member Kevin Camden, chair of the finance committee, assured residents the district has not spent 30 percent of the referendum proceeds — or $42 million — as some comments posted online have suggested.
Stephenson confirmed that only $3.1 million or 2 percent of the $139.1 million total had been spent as of Oct. 10.
“We are not doing this because we have a bond revenue problem,” Camden said. “It’s being done to maximize opportunity.”
The final $34.1 million in bonds is tentatively slated for a February 2021 sale, Stephenson said.