Lindbergh’s total savings from bond refunding now $1,768,432

The total amount of money Lindbergh Schools taxpayers will save from a recent bond refunding has increased by an additional $212,425 to a total of $1,768,432, according to Chief Financial Officer Charles Triplett.

On Sept. 8, the Board of Education approved the sale of $9.865 million in bonds to refund bonds issued in 2009 that carried an interest rate of 4.5 percent. The bonds were sold to Piper Jaffray of Kansas City. The company’s true interest cost — a combined measure of the interest and underwriting fees — of 2.386710 percent was the lowest of nine bids submitted.

Interest rates ranged from Piper Jaffray’s low bid to 2.650479 percent from Vining-Sparks IBG, Limited Partnership of Chi-cago. The difference in savings between the low bid and the high bid totaled $335,230.05. At that time, savings to district taxpayers totaled $1,556,007.

However, Triplett told the Call that with the last step of the recent bond refunding process, taxpayers saved an additional $212,425 through the district’s purchase of U.S. Treasury Notes. The original bonds from 2009 cannot be redeemed by bondholders until 2018, so Lindbergh was required to purchase government securities — using the proceeds from the new bonds — and place those securities in escrow until the old bonds mature.

While in escrow, these securities will earn interest totaling $212,425, which will be applied to retiring the old bonds.

“With this additional savings, our total savings from refunding the 2009 bonds equals $1,768,432,” Triplett said. “These savings, as well as the reduced interest rates on the new bonds, will directly benefit district taxpayers in the future by allowing us to keep the debt-service tax rate as low as possible. The total savings to taxpayers from all nine bond refundings since 1998 is now $10,621,086.”

Moody’s Investors Service reaffirmed Lindbergh’s Aa1 rating on the 2009 general obligation bonds. The Aa1 bond rating, the highest any school district has achieved from Moody’s, reflects Lindbergh’s long tradition of fiscally responsible financial operations, healthy reserves and limited plans for future borrowing, according to Moody’s.