Rosamond, California – The Southern Kern Unified School District successfully refinanced a portion of its outstanding General Obligation bonds to take advantage of historically low interest rates in the municipal bond market. The refinancing will generate over $400,000 in total savings, which will be passed on directly to local taxpayers in the form of reduced property tax bills.
The bonds were issued pursuant to a $12 million General Obligation bond program approved by local voters in 2002. The proceed of these bonds were used to upgrade classrooms, provide enhanced technology, complete the construction of Westpark Elementary School, and fund other school improvement projects.
The District availed itself of the prevailing low interest rate environment to refinance approximately $3.9 million of outstanding bonds, much in the way that homeowners refinance their mortgages. In addition, the District secured a high credit rating of “A+” from Standard and Poor’s, further reducing its cost of borrowing.
Savings were generated from a reduction in interest rates due to favorable market conditions and the District’s good credit rating. There was no increase in the term of repayment and only those bonds that produced savings were refinanced. The total savings of $416,000 exceeded the initial estimate of $375,000. Caldwell Flores Winters, Inc., the District’s Financial Advisor, assisted the District in the refinancing.
All of the savings will be passed on to the taxpayers in the form of lower tax bills; the District will not retain any portion of the savings. “The Board of Trustees and District Staff greatly value the strong support we receive from our community, and we are very pleased to complete this refinancing and to pass along these substantial savings to our local taxpayers”, said Jeff Weinstein, the District’s Superintendent.
The Southern Kern Unified School District was established in 1962 and currently educates approximately 3,200 students. The District operates two elementary schools, one middle school, one high school, an independent study school, and a continuation high school. The District will continue to monitor opportunities to refinance bond debt in the future and will pursue transactions that result in a benefit to local taxpayers.