A refunding plan approved by the Eldon Board of Education will save the district more than $500,000 in future interest payments.

A refunding plan approved by the Eldon Board of Education will save the district more than $500,000 in future interest payments. 

Earlier this month, the board of education approved the sale of $3.9 million in general obligation refunding bonds through their bond underwriter, L.J. Hart & Company of St. Louis with an average interest rate of about 2.99 percent. The district was able to reduce its future interest expense by about $545,337, according to Superintendent Matt Davis. 

“This plan achieves significant savings and allows the district to capture better conditions in the municipal bond market for the benefit of our taxpayers.  It also preserves considerable flexibility for the district in the future if more building improvements are needed, ``Davis said. 

The $545,337 plus the approximate savings of $3,318,665 from seven previous refundings since 1998 means the district has saved $3,864,002 of interest expense . 

The refunding bonds were reoffered to local financial institutions and individuals. According to Larry J. Hart, Chief Executive Officer of L.J. Hart & Company, local individuals acquired $175,000 of the Bonds. “This excellent support from the local community members helped with the success of this financing,” commented Mr. Davis. 

School Board President Jim Herriman, said that the $545,337 of interest savings by refunding, is an improvement of $56,107 from the August 19, 2019 projections. There is also another chance for additional savings. The bonds have a call feature for 2024. 

 “If interest rates are lower in 2024 or later, we can take advantage of that.  Meanwhile we are locking in these levels that are more than one-half percent (0.56%) lower than they were in 2014,” he said.  

the board was able to take advantage of three significant factors that made the proposal attractive. Interest rates are lower than they were in 2014, the bonds are subject to prepayment and the district’s ability to participate in the Missouri’s Direct Deposit Program. The direct deposit  program makes it possible for the district to receive a “AA+” rating from Standard & Poor’s Global on the refunding bonds. 

“It is nice to be able to save $545,337 of our taxpayers’ money and boost our total savings to $3,864,002 since 1998,” said Dan Currence, Vice President of the Board of Education.