The Hermiston School District’s recently reaffirmed outstanding AA- (double A minus) credit rating from Standard and Poor’s Corporation paid big dividends during yesterday’s refinancing of approximately $18M of general obligation bonds.
District officials said that in less than 20 minutes nearly all of the district’s offerings were sold in a feverous climate, as investors clamored to compete over the secure, credit-backed securities. An estimated $2 million will be saved by Hermiston taxpayers over the term of the bond, where interest rates were reduced over 2 percent (from approximately 4.75% to 2.72%), while at the same time reducing the term length by over two years.
“We took advantage of the district’s reaffirmed strong credit rating and market conditions to refinance (“refund”) some of our long term debt,” said Deputy Superintendent Wade Smith. “We are very excited to be able to share these savings with taxpayers who are likely to see reduced rates in about five years as the refinanced debt begins to mature.”
