The Board of Education approved the recommendation from the District’s financial advisor, Ameritas and bond counsel, Baird Holm regarding the issuance of the first tranche for the 2018 Phase 2 Bond. The total of this tranche will be $80 million. The financial adivosr and board counsel will now work with the Board President and Superintendent Dr. Logan to conduct a public sale of the bonds.
The first tranche will coincide with the need for funds based upon the construction schedule of the
Shared by Ameritas at a previous Board Meeting:
For the 2014 Bond Issue of $421 million, the authorization of bonds were issued in three tranches. These bonds were offered at public sale to any and all interested buyers with the bonds being awarded to the purchaser that offered the lowest available interest cost to the District.
The sale of bonds is done in separate tranches as the most cost effective method for the district. There are fixed costs with each tranche. Therefore, the more tranches there are the more overall fixed costs that take away from the amount of money that can be used for construction projects. Doing too few tranches and having the money sitting in a bank account increases the interest the District has to pay on the money. According to Ameritas, three tranches, spread out over three years, tends to balance out the interest payments and fixed costs.
For the recently approved $409.9 million bonds, it is estimated that the District will need to again issue bonds in three separate tranches. The process necessary for the bond sale takes approximately 60-90 days. This includes the preparation of the Preliminary Official Statement and presentation materials for the rating agencies, Standard and Poors and Moodys. Ameritas will work with District Administration and Bond Counsel to prepare these documents, work through the rating process and be flexible enough with our timing of the issue to make sure that the District’s needs are met.
As the construction spend down occurs and project funds are spent, the District will work on the
proposed and potential timing of any future tranches, taking into consideration, market condition, construction needs and bond fund cash flow projections.