The Rhode Island Health and Educational Building Corp. reported $13.4 million in debt-service savings from its $86.4 million negotiated sale of tax-exempt bonds under its public school revenue financing program.
The conduit issuer used the July 20 transaction to refund bonds issued in 2006, 2007, and 2008 for school construction projects in the Cranston, Cumberland, North Smithfield, Tiverton, Exeter West Greenwich, Foster Glocester and Bristol Warren school districts.
The bond issue, which carried an Aa3 credit rating from Moody's Investors Service, had a true interest cost of 1.95%. Executive Director Robert Donovan said that's well below the 4.65% average TIC of the prior issues.
Raymond James & Associates, JPMorgan, Janney Montgomery Scott, Morgan Stanley and Roosevelt & Cross purchased the bonds through negotiation.
"In this low interest environment, RIHEBC was pleased to refinance these bonds and produce significant debt service savings for school districts across the state," said Donovan, whose agency is in its 50th year. "The ability of the public school revenue financing program to not only issue the initial bonds but to also combine issues when market conditions are most favorable to produce significant savings, provides benefits to both the state and municipalities."
The $13.4 million in savings will on average reduce debt service municipalities pay by $1 million per year, according to Donovan.
