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Temple ISD reissues 2016 bonds; district projects $3.6 million net savings
Summary
District finance staff reported that a refunding of 2016 bond maturities will reduce outstanding principal from roughly $43.9 million to $40.2 million, produce a true interest cost under 4% and generate about $3.6 million in net savings after prepayments.
Temple ISD finance staff reported to the board on June 9 that the district completed a refunding of portions of its 2016 bond series and is projecting net debt-service savings of about $3.6 million.
The presenter said the series being refunded had outstanding maturities originally scheduled from 2026 through 2041, with a total outstanding principal of about $43.9 million as of Aug. 1. After the refunding, the new outstanding principal at closing will be approximately $40.2 million. The presenter told the board the refunding produced a true interest cost of about 3.896%, below the previously estimated figure and below 4%.
The presenter described a gross debt-service savings of about $4.3 million and explained that the district will apply defeasance payments totaling $725,000 at close and another $725,000 for fiscal year 2026; after those prepayments the district calculated net savings of approximately $3.6 million. The presenter said annual interest savings of roughly $300,000 are expected for many years between 2027 and 2040, with a smaller savings in the final 2041 maturity year.
Board members were told the district sought and used delegated pricing authority to time the market amid uncertain municipal supply and Federal Reserve rate signals. The presenter said the market conditions in late May produced more favorable pricing than the district had projected in April, improving projected savings by about $428,000 relative to the April estimate.
The presentation was informational; no vote or new authorization was recorded at the June 9 meeting. Board members expressed appreciation for the reported savings.
