The Upper St. Clair School Board voted Monday night to proceed with the refinancing of its 2005 bond issue.
The refinancing is expected to reduce the debt service expenses for the by a total of more than $3 million during the remaining 16-year life of the bonds.
The 2005 bond issue became callable in July 2012. District administrators did not believe that refinancing would be available, but the continued drop in interest rates and the strong demand for tax-exempt bonds made the refinancing possible.
"The reduction in our debt service payments will help address the projected deficits for 2013-14 and beyond. However, projected cost increases, such as the state-mandated pension obligations, remain significant financial challenges for the district," Superintendent Patrick O'Toole said.
The amount outstanding for the 2005 bonds is currently about $25.5 million and the bonds mature on July 15, 2027.
The interest rates range from 3.5 percent in the shorter term to 4.4 percent in the longer term.
The 2005 bonds were issued to refinance the 1997 bonds that were issued in conjunction with the renovation.
More recent market conditions have made the refinancing of the issue attractive. Interest rates are currently estimated at 0.6 percent for the shorter term and up to 3.5 percent in the longer term.
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