The Novato Unified School District (NUSD) has completed the issuance and sale of refunding general obligation bonds with a net savings to Novato taxpayers of over $1.2 million. Due to bond interest rates being low, NUSD determined it was prudent to refund the eligible Series 2014A bonds. The term of the new issued Bonds is the same as the Series 2014A bonds and will be paid in full in August 2029. The interest rate, or true interest cost, of the issuance was 2.84%.
Investor reception was further helped by a credit rating from Moody’s Investors Service of “AA1”, reflecting a positive change in credit rating. The Proceeds from the sale from the Refunding Bonds will pay the principal of the prior bonds upon redemption thereof and pay all closing costs associated with the refunding and issuance of the Bonds. Closing costs were $175,665.
The Bank of New York Mellon Trust Company, N.A. will act as the Paying Agent with respect to the Refunding Bonds and as Escrow Agent with respect to the Prior Bonds. Morgan Stanley & Co. LLC is the Underwriter and Government Financial Services is the financial advisor.
The district issued General Obligation bonds totaling $107,000,000 as approved by the voters in the 2001 election. Bond Series 2014A had been fully issued prior to the refunding. The newly issued bonds totaled $22,085,000.
“Through the competitive bidding process, NUSD received 15 bids for the Series 2014A refinance. This is a testament to the strong financial health of NUSD and our “AA1” bond rating,” commented Joshua Braff, NUSD Chief Financial Officer.
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