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Reeths-Puffer Schools 2019 Refunding Bonds
Reeths-Puffer Schools 2019 Refunding Bonds
Margie Bates
Wednesday, October 23, 2019

REETHS-PUFFER SCHOOLS

2019 REFUNDING BONDS (FEDERALLY TAXABLE)

 

The Board of Education of Reeths-Puffer Schools is proud to announce the successful sale of its 2019 Refunding Bonds (Federally Taxable) in the amount of $21,215,000.  The 2019 Refunding Bonds are being issued for the purpose of refunding certain outstanding indebtedness of the School District to the State of Michigan under the State of Michigan School Bond Qualification and Loan Program and to pay the costs of issuing the Bonds.  The Bonds reduce the repayments to the State of Michigan by a total estimated amount of $2,500,000.  The estimated reduction in repayments is based upon assumptions regarding the growth in the District’s taxable value and School Bond Loan Fund interest rate.

In preparing to sell the 2019 Refunding Bonds the School District, working with their municipal advisor, PFM Financial Advisors LLC, requested that Moody's Investors Service, a division of The McGraw-Hill Companies, Inc. ("Moody's") evaluate the School District's credit quality.  Moody's assigned the School District the underlying rating of "A3".  The rating agency cited the School District's moderately-sized tax base with some recent growth and access to liquidity through Michigan’s borrowing program in their rationale for rating the School District at this level.

 The School District's financing was conducted by the Michigan investment banking office of the brokerage firm, Stifel, the municipal advising firm, PFM Financial Advisors LLC, and the law firm serving as bond counsel, Thrun Law Firm, P.C.  The School District's 2019 Refunding Bonds were sold at a federally taxable interest rate of 2.54% with a final maturity of 2029 (a repayment term of approximately 10 years).

Jeffrey Zylstra, Managing Director with Stifel states, "Reeths-Puffer Schools’ Bonds were well received by the bond market.  We were able to take advantage of current low fixed interest rates that met the goals of the District and resulted in a significant savings that will be passed on to the District’s taxpayers."