In a little more than a week, the Issaquah School District will complete the final step of financing for its current capital projects campaign.
On March 10, financial firm Piper Jaffray will sell its fourth and final issue of bonds for the sale approved by Issaquah, Sammamish and Renton Highlands voters in 2012.
In a special election held in April of that year, voters approved more than $219 million in bonds to be sold to investors to finance repairs, upgrades, expansions and total rebuilds of a handful of school campuses, as well as athletic facilities districtwide.
Apollo and Issaquah Valley elementary schools were rebuilt over spring and summer 2014; construction on Sunny Hills Elementary, Issaquah Middle School and Clark Elementary will commence this summer.
The final bond issuance will consist of the sale of more than $54 million in new bonds.
The district and Piper Jaffray also are looking at potentially refunding district bonds issued in 2007 and 2008.
In investment parlance, refunded bonds are bonds with the principle cash amount held in escrow by the original debt issuer and are thus considered exceptionally stable investments by rating organizations. Refunding is used as a means to refinance debts to take advantage of interest rates that have lowered since the original bond issuance.
“From an interest rate perspective, this is a very opportune time to be accessing capital markets,” Piper Jaffray Senior VP Trevor Carlson said, speaking to the school board Feb. 11. “The global situation in Europe and China slowing and things of that nature have driven interest rates down to very, very low levels.”
Legally, bond refinancing can only financially benefit taxpayers.
Repayment of the school district’s bonds has been funded through property tax levies on lands within its boundaries. Property owners would see savings of “basically a penny or two,” according to Carlson, per $1,000 of property value. However, the savings would be almost double the 5 percent threshold preferred by the district, Carlson said.
The price of refund sales would depend on the market conditions for interest rates, but are estimated at more than $66 million on the 2007 bonds and $40 million on the 2008 bonds.
