The Examiner U-46 News Feed

District U-46 pondering debt refinancing option

By Seth Hancock
  The Board of Education in School District U-46 was presented with a debt refinancing proposal at its meeting on Monday, Jan. 10.
  Two resolutions were presented allowing the issuance of general obligation (GO) bonds in not-to-exceed amounts of $96 million and $44.8 million which are set for a vote on Jan. 24.
  The proceeds would be applied to a 2015A GO limited school bond series which has $44.3 million in outstanding principal and a 2015D GO refunding school bond with $101.6 million in outstanding principal. They are part of five outstanding bonds for the district, and both have an average interest rate of 5 percent.
  Robert Lewis, with PMA Securities, said the 2015A bond was non-referendum and “those were issued through the authority that’s in the School Code but is limited by the property tax extension limitation law. The 15D bonds were originally authorized by referendum. So, because there’s two different sources of authorization, you have a separate resolution for each.”
  “This does not impact the operating funds,” Lewis said. “It would go directly towards a lower tax bill.”
  If locked in now, Lewis estimated a savings of $18.7 million on the 2015D bond and $9.7 million on the 2015A bond.
  Lewis said the issuance would be through a competitive market which is different from previous refunding bonds issued by the district.
  “We wouldn’t be going to the public market like we did before,” Lewis said. “We’re directly bidding to the potential investors.”
  Term sheets have been distributed to potential purchasers with bids due by Jan. 20. Lewis said that will allow for a report prior to the Jan. 24 vote to provide more accurate savings estimates.
  Lewis said he didn’t see much changing before the Jan. 24 vote but did note an announcement of inflation rates would be released, which could effect it. The U.S. Labor Department did release December price inflation rates which showed it at 7 percent, the highest rate in nearly four decades.
  If approved, delegates would sign-off on Jan. 24, but the bond wouldn’t close until Oct.2 of 2023.