Janesville issues March bond notes; Moody's affirms Aa2 rating

The Janesville School District announced March 2025 debt issuances that district staff said will lower the net cost of borrowing while keeping projected tax impacts roughly in line with earlier modeling.

Mr. McCray, a district finance staff member who presented the item at the March 18 Finance, Buildings and Grounds Committee meeting, told commissioners the district issued a refunding of its bond anticipation note and sold a larger general obligation note this month. He said the first issuance refunded a $12,500,000 bond anticipation note (marked in the paperwork at a 5% coupon but reduced by premium to a lower effective cost) and that the district received roughly $942,000 in bond premium on that sale. He said the bonds’ stated coupon will read 5% but added that “the bond premium for this first issuance was just under a hundred k, 942,000 and change” and that the premium effectively reduced the net interest cost to about 3.26%.

McCray said the larger issue, labeled 2025B in district materials, was a general obligation note for roughly $139,300,000 that the district sent to market on March 3 and closed the week of the meeting. He told the committee the 2025B sale produced roughly $7,000,000 in premium and carried an interest rate “just over 4.21%,” which he said was below the district’s higher-modeled forecast and represented a form of cost avoidance compared with the modeled 5.25% scenario. “It is not a cost savings because it was a model. It's a cost avoidance for us,” McCray said.

McCray said the district continues to model longer-term debt-service schedules and will share debt-service charts when they are finalized. He described several technical features to the committee: (a) bond anticipation notes serve as short-term bridge financing until long-term bonds are issued; (b) bond premiums can be recorded as revenue and applied toward initial debt service and issuance costs; and (c) the structure of school debt service is not level each year but varies across a multi‑year amortization schedule.

The finance presentation also included a short description of who signs closing paperwork: McCray said paperwork is signed by district officials including “President Murray” and the board clerk, Commissioner Paul. Committee discussion touched on what the bond issuances mean for taxpayers; McCray said the district modeled mill-rate impacts and reiterated that the combined borrowing is projected to produce roughly an $0.81 impact on the mill rate for the first year under the district’s model.

Moody's rating

In a separate, consecutive briefing, administration staff reported Moody's reaffirmed the district's Aa2 general obligation rating. McCray reviewed Moody's strength-and-risk factors, saying Moody's Q&A included district actions such as contributions to Fund 73 (post‑employment liabilities) and Fund 46 (long‑term capital maintenance), modest but positive fund balance contributions, and the local economic base and enrollment trends. He summarized Moody's outcome this way: the district remained at Aa2 and is positioned in the upper tier of Wisconsin school districts rated by Moody's.

Committee response and next steps

Committee members asked for further details on how the rating or other credit factors might affect pricing or premium; McCray recommended follow-up with the district's municipal advisors. McCray said the district will publish the modeled debt-service charts once final figures are available so board members and the public can see annual principal-and-interest forecasts and how state aid interacts with the tax impact.

Actions noted at the meeting

The committee approved routine meeting steps earlier in the agenda. The committee voted to adopt the March 18, 2025 Finance, Buildings and Grounds agenda (motion and second; approved unanimously). The committee also voted to forward the district’s fiscal‑year‑to‑date revenue and expense summary to the full board for approval (motion and second; approved unanimously). Those procedural votes were recorded by the committee chair during the meeting.

Why it matters

Large, multi‑year borrowings and credit ratings determine the district’s access to capital and influence taxpayers’ long‑term debt service. Administration’s promise to publish debt‑service charts and the Moody's reaffirmation give board members and the public more visibility into how the district expects to pay the obligations and how state aid and premiums are being applied.