LONGMONT — The St. Vrain Valley School District sold $14 million in new bonds Thursday and refinanced $42.8 million of its 1997 bonds.
“Based on feedback I’ve received from our bond attorney today, in addition to feedback from Alex Brown (of UBS Paine Webber) and Steve Clark (of SB Clark Inc.), we did very well in the current market. We’re very pleased with that,” said Mark Pillmore, the district’s chief financial officer.
The St. Vrain Valley Board of Education decided in mid-March to go forward with a third issuance from its $212.9 million 2002 school bond.
The $14 million in new money will be used to finish projects that are in progress, including classroom additions, mechanical retrofits and fire alarm system upgrades at a handful of schools.
Initially, district staff had recommended the school board approve $15.2 million in bonds. The board also talked about tacking an additional $1.3 million on to complete prep work necessary to get the three elementary schools and one high school that have not been built from 2002 bond funds off the ground.
The school board decided it would use a portion of the money it saved from previous bond projects to pay for the prep work and ask for $14 million.
Clark, the district’s bond consultant, had recommended the district not move forward with a refinancing of all or part of its 1997 bonds unless it could get a 4 percent “present value savings or better.”
Both Standard & Poor’s Ratings Services and Moody’s Investors Service met with St. Vrain during the past few weeks to re-evaluate the district’s bond credit rating.
On March 29, Moody’s bumped its rating of the district’s bonds from “Baa1” to “A3” and affirmed its stable outlook affecting about $283.6 million in debt, including the current sale.
The upgrade in its rating reflects “the significant reductions in the district’s general fund deficit, improved financial management and the expenditure reductions management has undertaken to continue to make gains in the district’s financial recovery,” the report stated. The “A3” rating also “incorporates the district’s vulnerability as one of the few large districts in the state without a mill-levy override.”
Standard & Poor’s did not raise the district’s underlying credit rating of “BBB,” but it did improve its outlook on the bonds, from stable to positive.
The new outlook “reflects the likelihood that the district’s financial-recovery plan will maintain positive operating results and remedy its negative fund balance position,” the report said.
St. Vrain was told by its bond consultants that the new ratings would “make our bonds more competitive in the market and would drive our interest rates down a little bit,” Pillmore said.
The district will know more next week about how it fared with the current bond sale and the refinancing.
Paula Aven Gladych can be reached at 303-684-5211, or by e-mail at firstname.lastname@example.org.