On Thursday, December 5, 2013, the Cherry Creek School District successfully sold $31,215,000 of District General Obligation debt for savings of $4.2 million.
The bonds were sold competitively with bids received electronically via the internet. The winning bid was submitted by J.P. Morgan Securities with a True Interest Cost of 1.998%. The cover, or second best bid, was submitted by Citigroup Global Markets.
There were eleven additional firms that submitted bids including Robert W. Baird & Co., Stifel Nicolaus & Company, Morgan Stanley & Co. and Wells Fargo Bank as the next best bidders.
The issue refinances $35,345,000 of Series 2004 bonds which were outstanding and which carried an interest rate of 4.3%. The bond issue was structured as tax exempt bonds maturing over the period of 2014-2022.
“This transaction reduced the outstanding debt, while also lowering the average interest rate from 4.3% to 2%,” Guy Bellville, Cherry Creek School District CFO said. “The resultant savings are passed directly to the taxpayers of the District through reduced tax collections totaling over $4.2 million spread over these next 10 years.”
The very aggressive bids received today are a reflection of the investor demand for high quality bonds as well as the historically low interest rates existing today, according to the district’s financial advisors.
Earlier this year on March 1, 2012, the Cherry Creek School District successfully sold $48,855,000 of District General Obligation refunding bonds for savings of $4 million.
Cherry Creek is an extremely strong credit, as evidenced by the Aa1/AA ratings assigned by Moody’s and Standard & Poor’s, respectively; and the strong bids received and the number of bidders that participated are a reflection of the district’s quality, as perceived in the credit markets.
Dec. 11, 2013