On Wednesday, December 12, 2012, the Cherry Creek School District successfully sold $125,000,000 of District General Obligation debt with a True Interest Cost of 2.60%.
The bonds were sold competitively with bids received electronically via the internet. The winning bid was submitted by Bank of America Merrill Lynch. The cover, or second best bid, was submitted by Wells Fargo Bank. There were four additional bidders including Citigroup Global Markets; William Blair & Company; Stifel Nicolaus & Company; and Robert W. Baird & Co. Guy Bellville, Cherry Creek School District CFO, said that the district was able to take advantage of a very strong bond market and sell the bonds at historically low interest rates.
Because of the low interest rates, the interest cost of the bonds will be less than half of the interest cap authorized by the voters in the November election, said Mr. Bellville. Thus, district taxpayers will pay significantly less interest on this debt as a result of these lower interest rates.
According to the district’s financial advisors, the aggressive bids received today are a reflection of investor appetite for tax exempt investments. Cherry Creek is an extremely strong credit, as evidenced by the Aa1/AA ratings assigned by Moody’s and Standard & Poor’s, respectively.
All of the bonds authorized by the voters of the district in the November 2012 election were sold at this time. The proceeds from the bond issue will be used to enlarge some existing schools to accommodate growth, to renovate and upgrade existing schools, and to provide safety/security and technology enhancements across the district.