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Town finance team walks council through $55 million bond‑anticipation notes for voter‑authorized school bonds
Summary
Bond counsel and finance staff explained a one‑year tax‑exempt bond anticipation note sale that will fund early work on the voter‑approved South Kingstown school project; councilors reviewed required legal documents and were told proceeds and a bond premium will be available within days.
Bond counsel Karen Grande and town finance staff told the South Kingstown Town Council on June 23 that the town issued $55 million in tax‑exempt bond anticipation notes as the first step in financing the voter‑approved school bonds.
Grande said the notes are one‑year obligations with a stated coupon of 4 percent; because investors paid a premium at purchase, the town’s effective borrowing cost will be about 3 percent. She said the sale drew interest from 10 bidders and that Bank of America Securities was the purchaser. The premium — the up‑front payment investors made — will be available to the town immediately and can be invested until the note payment is due next year.
Council members asked where the detailed pricing and sale documents are posted. Grande and staff said the municipal market disclosure (preliminary official statement and final pricing information) is filed on the MSRB’s EMMA website and that the town will also post the documents on the school‑building project site for resident access.
Grande walked the council through the standard closing documents that will be signed: the signature and no‑litigation certificate (which memorializes purchaser, interest terms and that there is no pending litigation that would affect repayment), the tax compliance certificate (the town’s representations to the federal government about tax‑exempt use of proceeds), and the significant events disclosure filing the town must make on EMMA while the notes are outstanding.
Finance staff confirmed the premium received at closing will be deposited and that the town expects the wire of cash from the purchaser later in the week. Council members asked staff to report back with a calculation of the savings from the premium; staff said they would provide that number after completing the closing calculations.
No formal vote on issuing the notes was recorded in the public portion of the meeting; bond counsel said the documents require authorized town officers’ signatures and that the council president and director of finance are the designated signatories under the town’s bond authorizing act.
