FOR IMMEDIATE RELEASE: November 18, 2015
CONTACT: Allison Murray (408) 201-6052
Morgan Hill Unified School District Refunds General Obligation Bonds
District Property Owners to See Reduced Assessment Beginning in 2016
The Morgan Hill Unified School District took advantage of today’s low interest rate environment by refinancing (or “refunding”) its remaining general obligation bond issue from the District’s Measure B authorization approved by voters in June 1999. The refunding bonds will reduce existing debt service payments by about $1,917,000 over the next four years, resulting in lower property taxes beginning in 2016-17.
The sole purpose of refunding of the bonds was to lower annual debt payments and reduce property taxes for local residents and businesses. Superintendent Steve Betando stated “although the District receives no direct benefit from refunding the bonds, the Governing Board and administration recognize our fiduciary duty to manage the District finances, and in this case the opportunity to reduce the tax burden carried by our community members.”
As part of the refinancing process the District staff met with representatives of Moody’s Investors Service to obtain a credit rating for the new refunding bonds. Based on the District’s strong fiscal position, sound management practices, and large and growing tax base, Moody’s upgraded the District’s general obligation bond credit rating to Aa1 from Aa2. A rating of Aa1 is the highest of Moody’s “double-A” category, a level the District shares with only 33 other California school districts.
The refunding bonds were offered to investors on Tuesday, November 17th, and the response from investors was very strong resulting in more orders for bonds than there were bonds to sell. Orders were received primarily from money managers and institutional investors such as insurance companies and bond mutual funds, with over 20 different institutional investors placing orders for the bonds. The total borrowing cost for the refunding bonds is 2.06%