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District Completes Successful Bond Sale

Earlier this month, the Dublin Unified School District successfully sold $14.6 million of 2016 General Obligation Refunding Bonds and $60 million of Series A Bonds from the 2016 (Measure H) authorization.  The Bonds were fixed-rate, tax-exempt, and included no Capital Appreciation Bonds (CABs).

Refunding Bonds are similar in purpose to refinancing a home mortgage. The Bonds sold by the District pay off existing debt with funds borrowed at a lower interest rate. The savings are then passed on to the taxpayers in the form of lower property taxes.

Through the issuance of the 2016 Refunding Bonds, the District saved taxpayers $9.71 million over the full term of the bonds equal to approximately $5.9 million in present value savings or 35.75% of bonds refunded. Proceeds from the bonds will be used to refund the Election of 2004, Series C (Capital Appreciation Bonds).  The Refunding Bonds were sold at 2.99% interest, considerably lower than the 5.10% average coupon of the refunded CABs.

In addition to the Refunding Bonds, the District issued Series A Bonds to fund capital facility projects within the District. This $60 million bond sale is the first series issued under Measure H, passed by the Dublin community in June 2016.  The Series A Bonds were issued with a 30-year maturity term which will help to provide capacity for subsequent series of bonds and stay at or below the maximum tax rate of $60 per $100k of assessed value. The true-interest-cost for the Series A bonds is 3.50% over the 30-year term, an extremely favorable rate reflecting historic lows in the market.

“We are extremely pleased to bring a significant savings to Dublin taxpayers -- over $9.7 million in savings over the life of the refinanced bonds. We are also excited to continue work in our district with the funding provided by Measure H and the first issuance of those Bonds,” said Board President Megan Rouse. “The Board appreciates the support of our community, and remains deeply dedicated to fiscal responsibility and prudent stewardship of our resources.”

Additionally, the District benefitted from rating upgrades from both Moody’s Investors Service and S&P Global Ratings. The new ratings of Aa1 by Moody’s and AA by S&P places the District among the top tier of California school district credits.  These are very strong ratings largely attributed to the District’s management, consistent Board leadership, growing student enrollment and tax base. These strong credit ratings helped to bolster investor demand for the District’s bonds and ultimately lower the cost of borrowing.

Several firms comprise the district’s bond finance team. KNN Public Finance, a Limited Liability Company, served as Municipal Advisor. Jones Hall, served as Bond and Disclosure Counsel for the transaction.  The Series A Bonds and Refunding Bonds were separately sold and awarded pursuant to a competitive bidding process.  The winning bidders included Citigroup Global Markets Inc. for the Refunding Bonds and FTN Financial Capital Markets for the Series A Bonds.