Favorable market saves $5 million on bond sale
A favorable bond market recently helped Milford Exempted Village Schools save around $5 million after it completed the sale of bonds on Wednesday, Feb. 2.
The bond issue was approved by voters in November 2021, on an estimate of 30 years at a 3.5 percent interest rate. However, on the day of the bond sale, lower-than-expected interest rates allowed the district to experience an overall issuance cost of 3.08 percent. Ultimately, this will result in collecting $5 million less in taxes from residents over the life of the bond than what was approved on the November ballot. Milford officials participated in the bond sale at RBC Capital Markets downtown.
“This was a true ‘win-win’ scenario for us,” said Milford Treasurer Brian Rabe. “During the sale, our bonds were very attractive to investors. That is due in part to our high bond rating (Aa2) and our financial stability as a district. This is great news, to be able to save our taxpayers money while still bringing in the revenue needed to complete the project.”
Voters approved the district to sell bonds to raise $55.9 million to build a new 6-8 middle school on the current Milford Junior High campus.
When a bond issue is approved, a school district gets consent from voters to raise taxes to pay for a loan or bond. A financial institution sells the bonds, another name for an IOU, and gives the money to the school district. The tax money pays back the bond and the interest over several years to the bondholders.
