TROY — Troy City Schools Treasurer/CFO Jeff Price recently shared information during the Board’s May 14 Special Meeting about Troy City Schools’ new recently locked-in interest rates as part of a refinance to portions of the districts outstanding bonds.
According to Price, this will save businesses, home and land owners in the district $441,892.35 over the next 8 years.
These savings are generated by lowering the interest costs that taxpayers will be paying over the life of the bonds. The district achieved a coupon rate of 1.76% and an all-in interest rate of 2.01% over the life of the new loan.
According to Price, these are impressive results for the Troy City School District. The refunding bonds have the same final maturity of Dec. 1, 2028 as the original bonds.
The bond industry standard considers a refinancing economically feasible when the net present value savings as a percentage of the refunded bond paramount exceeds 3 to 5 percent. The net present value savings of the district’s reduction in interest represents a savings of 11.075%.
The savings will lower the millage required to be collected and future payments that taxpayers will make on the bonds will be lower.
“Our team was able to act quickly to lock in the historically low rates,” Price said. “We have been planning this for the last several months and we were waiting for the right time to make the refunding move. Fortunately, we were able to see greater than average savings helping all taxpayers of Troy Schools.”