The Ann Arbor School Board of Education is pleased to announce that it will save its taxpayers $3.3 million in reduced interest expense over the next 14 years following the successful sale of $30.8 million of refunding bonds.
The original bonds issued in 2006 were part of the School District’s 2004 capital improvement program. Because interest rates have declined since the original loan was made, the District is refinancing the bonds. The District will not actually receive any money from the refinancing but taxpayers will pay a lower amount in the years ahead as a result of the lower interest rate.
In preparing to sell the Refunding Bonds, the AAPS requested that Moody’s Investors Service evaluate the District’s credit quality. Moody’s reaffirmed the District’s very strong Aa2 credit rating, citing the Board’s efforts to replenish its savings account and recent implementation of cost reductions and operational efficiencies.
The Ann Arbor Board of Education, with Superintendent Jeanice Swift.
“We are very pleased that refinancing the bonds will result in savings for our residents and businesses,” said Superintendent Jeanice Swift. “A long standing goal of our Board of Education is to continuously look for ways to identify savings without impacting our classrooms or instructional programs. As a District, we remain committed to offering our students the highest quality education possible.”
The bond refinancing was conducted by the investment banking firm, Siebert Brandford Shank, the District’s financial advisor, Stauder, Barch & Associates and its bond counsel, Miller Canfield Paddock and Stone. The refunding bonds were sold at an interest rate of just 2.7%, which will replace bonds issued at 4.6% in 2006.
Marios Demetriou, Ann Arbor’s Chief Financial Officer states: “The District’s bonds were well received by the bond market with a huge demand from investors. We were able to take advantage of very low interest rates that exceeded our goals and provided a nice level of savings for our taxpayers.”
Quality Programs. Quality Schools – This is what the Ann Arbor Public School District is known for. The AAPS 19 elementary schools, two K-8 schools, five middle schools, five high schools, one pre-school and one online academy all represent exceptional educational opportunities for students. New initiatives such as the Pathways to Success Academic Campus, A2STEAM at Northside K-8 school, the International Baccalaureate (IB) offered kindergarten through 12th grades at Mitchell Elementary, Scarlett Middle and Huron High Schools, infusion of World Language instruction in our schools including Spanish, Chinese, Arabic, German, French, Latin, and American Sign Language, as well as Early Fives classrooms and technology infused in every school, makes AAPS the choice for educational achievement in Washtenaw County. Visit AAPS at a2schools.org.
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