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Horry County Schools: $225M bond sale set; consultant outlines possible partial refunding of 2015 series
Summary
A bond consultant told the school board the district will sell $225 million in bonds Thursday and is positioned to partially refund two 2015 series if market rates produce at least $2.1 million in lifetime savings; Moody’s affirmed a AA2 rating, and bond counsel will prepare a resolution for the board’s next meeting.
Mister Newrick, the district’s bond advisor, told the Horry County Board of Education that Moody’s Investor Service affirmed the district’s “double a 2 credit rating” and that staff plans to sell $225,000,000 in bonds on Thursday at 1 p.m. He said the district also has a near-term opportunity to partially refund two series issued in February 2015, whose prepayment date and federal tax rules create a refinancing window this fall.
Why it matters: Newrick said a successful refunding could lower the interest rate on the affected series and reduce annual debt service. Using his spreadsheet comparison, he estimated current principal-and-interest for the outstanding 2015 series at about $81,400,000 and projected the new series would total about $79,300,000 — roughly $300,000 per year in net savings, or about $2,100,000 over the life of the refunding, if the assumed refunding rate of 3.025% is achieved.
Board and staff next steps: Newrick described the numbers as informational and said bond counsel, Ms. Heiser, will draft a resolution for the board to consider at its next meeting that would authorize issuance if the transaction meets the board’s minimum net-savings threshold. He emphasized the refunding is contingent on market conditions and the federal tax-code timing rules that permit delivery up to 90 days before the bonds’ prepayment date.
On credit and pricing: Board members asked whether a larger single refunding would by itself raise the district’s credit rating; Newrick replied that upgrades depend on Moody’s scorecard and factors such as the wealth indicator rather than a single refinancing event. He also described South Carolina’s state-intercept program, which he said provides an AA1 intercept rating in addition to the district’s AA2 underlying rating, narrowing yields but not guaranteeing a material amount of incremental spread savings.
What remains uncertain: The presentation did not commit the district to a refunding — staff will only proceed if the transaction yields the board’s required net savings. The precise refunding structure, final pricing and formal vote will be set out in a resolution prepared by bond counsel for a future meeting.
