DALLAS -- Trustees of North Little Rock School District No. 1, Ark. voted Thursday to accept Well Fargo Bank NA’s bid of 4.366% for $125 million of the Pulaski County district’s general obligation bonds.
The bonds were priced June 18. The sale of the 30-year bonds is set for July 2.
Proceeds will finance the first phase of a $265.5 million capital improvement plan. The district expects to issue $200 million of bonds for the effort.
Work will include several new elementary schools and initial construction of a new high school.
The district’s $159 million of outstanding GO debt has an underlying rating from Moody’s of A1, enhanced to Aa2 with coverage by the state’s school bond program.
The district had expected an interest rate of 5% when the capital improvement program was proposed, said Scott Beardsley of First Security Beardsley Public Finance. The division of Crews & Associates is the district’s financial advisor.
As a result of the lower rate, Beardsley said, annual debt service will be more than $1 million less than expected before the election.
Debt service will be $6.6 million in 2014, he said, with annual payments thereafter of $7 million to $8 million.
The capital program involves closing eight of the district’s 21 campuses, and renovating or replacing the remaining 13 facilities. The district expects to save $8.5 million a year with the reduced operations.
The bonds are supported by a property tax increase of 7.4 mills approved by voters in February 2012.
North Little Rock School District No. 1 is the eighth-largest district in the state.