Worth County R-III Approves Sale of $520,000 General Obligation Bonds

The Worth County School Board approved the sale of $520,000 worth of General Obligation Bonds Issue to its municipal bond underwriter, L.J. Hart & Company of St. Louis. "We appreciate the strong vote of confidence we received from local patrons at the election and want to lock in interest rates that are highly favorable," said Board President Jubal Summers. These new money General Obligation Bonds were approved by about 61.50% of the voters for the purpose of providing funds to prepay the existing Series 2005 Energy Management Equipment lease financing between the District and Bank of America Leasing & Capital, LLC. By prepaying the Series 2005 Lease, the district frees up approximately $62,000 per year of operating funds that can be used for other purposes.

According to Dr. Roger Adamson, Vice President with L.J. Hart & Company, the bonds were offered to local financial institutions and were subsequently acquired by banks around the state of Missouri. Superintendent Matt Robinson mentioned he was pleased efforts were made to accommodate local investors. "It is nice that our marketing procedures encouraged this involvement while still receiving attractive interest rates," Mr. Robinson commented.

The Board of Education selected the negotiated sale of bonds in order to capture current market conditions, to be certain that local individual investors and banks received an opportunity to purchase the bonds, and because the proposed interest rates were fair based on current conditions in the municipal bond market. Mr. Robinson stated that the District did compare proposed interest rates with national bond indexes and other comparable issues with a similar rating quality to be certain that the District's rates were favorable. "Based on pricing of these other financings on April 21, 2011, the date firm rates were proposed to the district, and the national indexes for AA rated General Obligation Bonds, our rates were as good as or better than some other sales for a similar quality level of bond issue," Mr. Robinson remarked.

According to L.J. Hart & Company, the bonds are scheduled to mature on March 1, 2013 through March 1, 2021 with reoffered yields ranging from 1.30% to 3.25% and total interest expense is slightly below the original projections. The interest income to the investors from the bonds is exempt from federal and state of Missouri income taxes and the bonds were available in $5,000 denominations.

These bonds carry an AA+ rating from Standard & Poors Corporation due to the District's participation in the State of Missouri Direct Deposit Program coordinated through the Missouri Health and Educational Facilities Authority.

The bonds do contain an optional redemption (call) provision on and after March 1, 2014 at no penalty that will facilitate the reduction of future interest expense in the event of prepayment or a future refunding to lower rates if market conditions make it economically feasible. The legal documents to complete the issuance of bonds were prepared by John W. Brickler, Esq., of Spencer, Fane, Britt, & Browne LLP in its role as bond counsel for the District.