CALIPATRIA – The Calipatria Unified School District (CUSD) successfully refinanced a portion of its general obligation bonds, taking advantage of low interest rates, resulting in significant savings for taxpayers.
The transaction is like a homeowner refinancing a home loan. This welcomed transaction comes at a time when the community is coping with the impacts of COVID-19 and as the residents of Niland, in the northern part of the District rebuild from a fire that devastated the community earlier this year.
The refinancing of a portion of the District’s outstanding general obligation bonds garnered over $920,000 in total savings which will be realized as lower property tax payments.
The bonds were sold at near historic low interest rates, due to prevailing market conditions. In addition, there was no increase in the term of repayment and only those bonds that produced savings were refinanced. All the savings are passed on to the taxpayers in the form of lower property tax bills, and the District will not retain any portion of the savings.
The Board of Trustees directed its staff and Financial Advisor, CFW Advisory Services, at it’s March 3, 2020 board meeting provide relief to taxpayers. The District’s bonds are deemed very desirable by investors, based on the Districts ability to maintain a strong S&P Global credit rating of “A”, despite the prevailing economic uncertainty due to COVID-19.
Correspondingly, the District’s bonds were well received in the market, and most maturities were oversubscribed with the demand for bonds exceeding amounts available to sell. All these positive factors enabled the District to lock in an interest rate (TIC) of approximately 2.6% for the remaining life of the bonds, which represents a near historic low for this type of transaction.
The transaction closed on September 3, 2020, and the County will be provided a lower payment schedule for the refinanced bonds. The District’s action to refinance its general obligation bonds was unanimously approved by the Board of Trustees. Board President Mr. Raul Navarro, said, “The Board’s action reflects our continued commitment to looking out for our taxpayer’s interests. We are pleased that this action will benefit our residents, especially during this difficult time.”
We greatly value the support our school district receives from our community, and we are happy that this refinancing saves our local taxpayers almost $1 million,” said Doug Kline, the District’s Superintendent.