News : School bond refinancing to save VS district 1.3 million

Bad news – or at least uncertain news – for the U.S. stock market means good news for Vinton-Shellsburg School District taxpayers.

Because of uncertainty about the stock market, says Travis Squires of Piper Jaffray & Co., the district was able to get unusually low interest rates for the refinancing of the school’s debt.

“People are looking for more secure investments,” said Squires. “And these bonds are backed by the taxing authority of the district.”

The school board met on Wednesday to approve a $10 million bond sale that will save the district more than $1.3 million between the budget years 2015-2025. The interest rate on the district’s debts will shrink from 4.2 percent to 1.54 percent (1.39 percent plus refinancing costs). The district will not have to pay any up-front closing costs.

“It’s a good deal in today’s market – a better deal actually,” said Squires.

Most of the bonds were sold to Iowa banks, including $600,000 to Cedar Valley Bank, which has a Vinton branch. Other local banks may have participated through intermediary companies, said Squires.

Total savings are estimated to be $1,330,152.

"It was a great opportunity and I feel fortunate that everything came together so the savings were even more than we initially estimated," said Superintendent Mary Jo Hainstock.