During its September 19, 2019 public business meeting, The Colonial Board of School Directors unanimously approved a resolution to refinance the outstanding Series 2014 General Obligation Bonds that are callable in 2020. The outstanding principal amount of these bonds is approximately $9.15 million with interest rates ranging from 1.50% to 3.75% and final maturity to February 15, 2034.
In making the refinancing presentation to the Board PFM Financial Advisors, LLC, Managing Director Scott Shearer announced that Moody’s Investors Service had recently reaffirmed the Aaa rating it had first assigned to the Colonial School District in May 2017. Colonial’s large and growing tax base with above average resident wealth and income, healthy financial reserves and liquidity position, strong management and average debt and pension obligations were factors in the 2017 upgrade. Also cited was the District’s practice of multi-year budgeting and capital planning.
Moody’s judges obligations rated Aaa to be of the highest quality and subject to the lowest level of credit risk. This makes Colonial attractive to investors and enables it to secure lower interest rates on bonds.
Less than 10 of the Commonwealth’s 500 public school districts have an Aaa rating.
By refinancing the 2014 Series General Obligation Bonds, Colonial is looking to save as much as $500,000 on debt service.