The Clay Local School District has participated in the refinancing of $4.8 million in outstanding bonds in an effort to "lock in a lower interest rate that will save local taxpayers a total of $545,000 in interest payments" over the next twenty years, according to Michael Burns of Robert W. Baird & Company.
The Columbus-based office of Robert W. Baird & Co., a global investment banking and asset management firm, led the refinancing. The refinancing action took place in the fall of 2015 and became effective for the 2016 tax bills.
"The district refinanced its Series 2008 Classroom Facilities Refunding Bonds at an interest rate of 3.05 percent down from the rate of 4.97 percent," said Tony Mantell, Superintendent of the Clay Local School District. "The new rate represents a savings of 8.6 percent of total bonds refinanced. That is nearly three times better than the industry refinancing standard (three percent) set by the Government Finance Officers Association."
According to Mantell, the bonds retain their original final maturity date (December 1, 2036). Ohio school districts are required by law "to keep funds for bond financing separate from operational funds," said Mantell. "Therefore, the savings will be passed on directly to property tax payers annually and will not be used by the district for school operations."
The Clay Local School District "took full advantage of a low interest rate environment, locking in a lower rate before the recent jump in yields."