The Loveland City School District became the first district in Ohio to issue taxable qualified school construction bonds available under the federal stimulus.
By taking advantage of a provision allowing for a tax credit on federal taxes on the QSCBs, the interest rate on the bonds is 0%, said bankers at Robert W. Baird & Co., the underwriter on the deal.
The district will use proceeds from the $6 million deal for a number of energy-efficient upgrades at school buildings. Baird estimated the district will save about $2 million in interest expenses by issuing the QSCBs.
“The district wanted to pursue this worthwhile energy project, and the bonds available under the stimulus plan allow them to pay for the upgrades at a lower cost to taxpayers,” Baird banker David Conley said in a statement after the closing.
Under the American Recovery and Reinvestment Act, a school district can issue taxable qualified school construction bonds through 2010 for construction projects and land purchases. Another $11 billion in QSCBs is available next year. Only seven QSCB deals have been done since they became available in February.