The Sunnyvale School District successfully refinanced a portion of its outstanding general obligation bonds to generate approximately $5.2 million in total savings, announced Dr. Michael Gallagher, Superintendent.
Much like refinancing a home mortgage, school districts can revisit previously sold bonds in order to reduce interest rates and thereby reduce the amount of payments due. In this case, because district taxpayers contribute the bond debt payments, the savings are directly passed on to them in the form of reduced property tax bills over time. For the Sunnyvale School District taxpayers, the refinancing means a reduction, or savings, of approximately 11 percent compared to prior debt payments.
“Approximately $46 million of outstanding bonds were refinanced,” said Lori van Gogh, Sunnyvale School District’s Chief Business Officer. “We carefully evaluated all bonds to ensure that refinancing was able to produce significant savings to local taxpayers,”.
Strong demand for the District’s bonds was largely driven by the District’s superior credit rating. As part of the financing, District staff were able to successfully reinforce the District’s credit standing, garnering a rating of “AAA” according to S&P Global Ratings, a bond rating agency. This puts the District in the top 3 percent of school districts in the state, making investors aware of the strength of its creditworthiness.
“The Board of Education and District Staff greatly value the strong support we receive from our community,” said Michelle Maginot, President of the Board of Education. “We are very happy to complete this refinancing and to secure a substantial amount of savings for our local taxpayers.”
In the 122-year history of the Sunnyvale School District, we have been very fortunate to have received generous community support for all four of our Bond Programs. These programs help with maintenance and upgrade needs but also the development of new learning space design standards with the goal to create flexible learning environments. Our staff and students are incredibly grateful to the Sunnyvale community for the beautiful classrooms and campuses that support the teaching and learning happening at all 10 of our schools.
To learn more about our bond program and projects visit https://www.sesd.org/domain/894.