CLEARFIELD – The Clearfield school board on Monday night voted to move forward with a bond refinancing opportunity while interest rates remain low.
Last week, Jamie Doyle, PFM Group managing director, told the board interest rates have come back down after spiking upward last March when stay-at-home orders were issued and COVID-19 became a reality for the United States.
“Things calmed down thereafter,” she said, “… all-time, all-time lows were set in August of 2020 and then things wiggled around for a little bit within a narrow range.”
While rates did tick upward somewhat in late February and early March of the current year, Doyle assured the board that the market climate has calmed once again.
Doyle proposed the district refinance a small portion of its 2012 bond that was leftover following a successful refinancing in 2019, in addition to its entire 2013 bond.
“We’d clean up the 2012 bond and refinance the 2013 bond, which is the larger and longer bond series,” she said. “That’ll be the driver of your savings.”
She proposed the issuance of a 2021 bond series with a principal of $16,310,000. She estimated a present value savings of $582,966, but PFM structured the refinancing for the most savings to occur later.
She said because of the district’s history of successful bond refinancing, the high points in its debt portfolio fall within the timeframe of 2027 through 2036.
“So, we can use the savings from this refinancing to smooth over your debt portfolio,” Doyle said, pointing out a future value savings of $751,940. “It’s a very healthy refinancing opportunity.”
The board on Monday night authorized the administration to work on the refinancing with PFM, its bond counsel, Eckert Seamans Cherin & Mellott LLC and solicitor, Beard Legal Group.
Doyle said the board will be asked to consider a parameters resolution April 26, which in turn would allow PFM to issue the bond, if certain parameters are satisfied, like a minimum net savings of $315,000.
Doyle also anticipated that the district’s competitive Internet bond sale would occur sometime around May 3, and if successful, settlement would be around June 7.