06/2/2008 - District Saves Taxpayers Based on Lower Interest Costs

On April 17, 2008, DeKalb School District 428 sold the first $30 million of the $110 million referendum-approved bonds. The Board of Education elected to sell the bonds in three phases based on its construction spending requirements in order to reduce the interest cost on the borrowing. The additional bond issues will be sold in 2009 and 2010 as dictated by the construction draw schedule.

Prior to the sale, Moody's Investor Services reaffirmed the District's "A1" rating on the bonds. The district's bond sale benefitted from stable market conditions and interest rate reductions by the Federal Reserve. By entering the market at this particular time, the district was able to save taxpayers by obtaining a lower interest rate. The all-in true interest cost on the bonds was 4.53%, which was lower than originally projected during the referendum campaign. The yields on the bonds compare favorably to other similarly-rated bond issues in the market at the same time, including Southern Illinois University and the Chicago Transit Authority. The District also sold $4,650,000 in refunding bonds, refunding outstanding Series 1997 bonds and saving taxpayers $283,000 of interest over the life of the bonds.

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