Tyler ISD plans to refinance more than $9 million in bond funds for a potential savings of more than $1 million.
This savings estimate is based on current projections and could change. The district will only make the move to refinance if rates are favorable.
The TISD board of trustees on Monday authorized the district superintendent, interim superintendent and chief financial officer to execute the final pricing documents if the parameters are met for savings.
Chief Financial Officer Tosha Bjork said it will take the district about one month to prepare the necessary documents.
The funds involved will be $9.05 million from the bonds sold in 2006 and 2007.
Dusty Traylor with RBC Capital Markets, the district’s financial advising firm, said they normally don’t recommend a refinancing unless it will result in at least 3 percent savings and this is projected to be well above that.
The district will not refinance all of the bonds that it could because more than $9 million will become callable next year. Traylor said this means the district could pay them off early.
Because of that, the district will leave that amount untouched so it can reserve the right to call those bonds in early and pay them off.
Ms. Bjork said the school district typically refinances its bonds at least every other year when the market is favorable.
“It reduces what we have to pay in the future in interest, so I mean it saves money in the long run,” Ms. Bjork said.
She said past decisions to refinance and pay off debt early allowed the district to add the debt from its most recent $160.5 million bond package without raising the debt service tax rate.
The district owes about $310 million in bond-related debt associated with the 2004, 2008 and 2013 bond packages, Ms. Bjork said.