School Board bonds draw 'super' rate
The St. Martin School Board continued a string of very successful bond sales last week with the awarding of bids on the sale of the first installment of the $64,500,000 in general obligation bonds approved by parish voters earlier this year.
The board’s sale of $10 million in 20-year bonds drew a low interest rate of 2.56 percent when bids were opened last Thursday. Consulting bond attorney Grant Schlueter with Foley & Judell LLP called the interest bid “a super sale, an extremely low interest rate, the lowest I’ve ever seen on 20-year bonds.”
The successful bidder – one of four participants – was Fidelity Capital. The highest bid was 2.7 percent.
The latest percentage rate continues a downward trend for school bond issues sold since 2010 when a $10 million issue drew a low bid of 4.28 percent.
The bonding attorney pointed out that Standard & Poor’s had given the St. Martin school system a credit rating of A+, a positive reflection on “the very strong financial management of this school board.”
Schlueter told board members the money was scheduled to be deposited in the system account on July 21.
The bond proceeds will finance school and technology improvements around the parish. But the bulk of this first installment has been earmarked for upgrades on the Breaux Bridge Jr. High campus as mandated by agreements made under a desegregation suit facing the board.
The board also authorized Schlueter to proceed with the legal steps necessary to seek the refinancing of $7 million of a $10 million set of bonds sold in 2009 at 4.28 percent rate.
Schlueter explained that if the sale drew an interest rate closer to what last week’s issue went for it could save parish taxpayers around $30,000 per year, or about $400,000 over the life of the bonds.
Supt. Dr. Lottie Beebe complimented board members for their diligence in managing the system’s finances. “The A+ rating from Standard & Poor’s is one of the highest ratings an entity can receive and ... would not have been attained if it were not for the strong financial status of the school system.”