For immediate release
October 4, 2024
NUSD bond refinancing saves taxpayers $1.2 million
(Novato, CA)…Novato Unified School District (NUSD) completed the issuance and sale of general obligation debt redemption bonds last summer, resulting in more than $1.2 million in net savings to Novato taxpayers. Due to low bond interest rates, NUSD has determined that it is prudent to retire eligible Series 2014A bonds. The new notes will have the same term as the Series 2014A Notes and are expected to be paid in full in August 2029. The interest rate or true interest cost of the issue was 2.84%.
Investor acceptance was further facilitated by the ‘AA1’ credit rating from Moody’s Investors Service, reflecting positive changes in credit ratings. The proceeds from the sale of redeemable bonds will pay the principal amount of the prior bonds upon redemption and pay all closing costs associated with the redemption and issuance of the bonds. Closing costs were $175,665.
The Bank of New York Mellon Trust Company, NA is acting as the paying agent with respect to the Refund Notes and as the escrow agent with respect to the Prior Notes. Morgan Stanley & Co. LLC is the underwriter and Government Financial Services is the financial advisor.
The District issued general obligation bonds totaling $107 million following voter approval in the 2001 election. Bond Series 2014A was issued in full before being redeemed. The total amount of newly issued bonds was $22,085,000.
“Through a competitive bidding process, NUSD received 15 bids for the Series 2014A refinancing, which is a testament to NUSD’s financial health and the strength of our AA1 bond rating.” NUSD Chief Financial Officer Joshua Braff commented.
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