After the approval to pursue a refunding of bond money, Mansfield ISD is anticipating a savings of more than $50 million in debt service payments.
Bond refunding allows the district to exchange its higher-interest debt for that of a lower rate—similar to refinancing a home mortgage.
Since 2010, the district has saved taxpayers a total of $65.9 million through bond refunding. In addition to that, MISD will save more than $50 million over the next 25 years with this latest bond refunding.
Jeff Robert with Hilltop Securities presented the good news to the board. He said the action gives the district a lot of flexibility and cushion. Mr. Gonzalez noted that Mr. Robert has been advising Mansfield ISD for 23 years and they appreciate his knowledge and advice.
“This is really good news,” said Board President Karen Marcucci. “Our students really are the ones who benefit from this. We work diligently to be good stewards of the money given to us; so when we can save taxpayer dollars while maintaining the integrity of the education and programming we provide, that’s a win.”
On Sept. 22, the school board approved the motion to allow staff members to work with the authorizing financial team in order to issue the refunding bond at the best time, without further approval at a future board meeting, since interest rates are at historic lows.
MISD has maintained outstanding ratings from Moody’s, Standard & Poor’s (S&P) and Fitch Ratings, the top three credit rating agencies, which allows the district to achieve the lowest interest rates available for bond financings.
Mansfield ISD also has no capital appreciation bonds (CABs), which many other fast-growing districts have accrued. The interest on a CAB keeps compounding until payment is due, causing the interest-to-principal payback ratio to be significantly higher than traditional bonds.