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William Penn SD bond sale nets better rates, lower long-term debt cost, district official says
Summary
Melissa Hughes reported a successful bond sale that raised $13.1 million for cash flow and about $12.7 million for construction; the combined average interest rate was 4.1 percent and the sale reduced estimated long-term debt service costs compared with earlier projections.
Melissa Hughes provided a bond-sale update during the district's February budget meeting, reporting that the most recent sale performed better than prior estimates and will modestly reduce long-term debt service costs.
"The bond sale went really, really well," Hughes said, calling the transaction a “home run.”
Hughes said the district borrowed $13,100,000 for cash-flow purposes; a separate issuance will net about $12,700,000 for construction projects. The borrowing carries a 20-year term, and officials expect the cash to be available in early to mid-March. She said the combined average interest rate across the two borrowings was 4.1 percent, compared with about 4.38 percent for the district's 2023 borrowing.
Hughes and presenters credited strong investor demand and Raymond James' work identifying investors for the favorable pricing. She estimated the revised plan would save roughly $1.4 million over the life of the debt relative to the December presentation and that about $70,000 of that improved outcome will show up in next year's numbers.
Board members asked whether the estimated millage-equivalent impact had already been included in projections for 2025-26. Ian Tyson of PFM said the model includes the expense of the new debt service, though the plan did not assume a tax increase at this time. "The expenses for debt service including existing debt service and the new debt service are included in Ian's model," a district finance official said during the discussion.
No formal action was taken at the meeting on the bond sale; Melissa Hughes said the district will continue to refineTiming and amounts for later planned borrowings in 2026 and 2027 to try to slow the addition of debt service where practical.
