SILVERDALE — Major investors were chomping at the bit to buy Central Kitsap School District bonds.
“It was a very successful event,” said Doug Newell, CKSD executive director of business & operations, of the April 21 sale.
“We were over-subscribed across most of it.”
The bonds allow CKSD to have $220 million in funding to build a new high school and middle school and upgrade other buildings.
Newell said an analyst from one of the investing groups called him the week before, and that he spent more than an hour answering the investor’s many questions about the Central Kitsap area.
“He had downloaded our long range facility plan, wanted to talk about phase III investments. We got into what we were doing in Fairview (Middle School), why are we where we are at? What does the shipyard do? What does Bangor do? How come they’re not subject to BRAC (Base Realignment and Closure). We got into all kinds of details.
“Date of sale, we decided to go out for $150 million in bonds. His investment firm came in wanting $50 million of the 150. So there was some big guys that came in there … ultimately he didn’t get that because we had a little bid-off. We could have sold about $450 or $500 million worth of bonds. So, good time,” Newell said.
Newell said that because of the low interest rates, that the debt service was projected to be $23 million less than what was originally estimated five months ago.
“Interest rates were good; we went out and captured those lower interest rates. Right now it’s pretty favorable. If things hold true on our model we’ll be very successful at doing this at a lower tax burden than we had promised initially to our taxpayers,” Newell said.
“That $23 million is a big deal,” CKSD Superintendent David McVicker said. “It plays out in better management of the payment over time.”
The April 21 sale was for $150 million ($200 million debt service). A second issue of bonds ($103 million debt service) will be put out for bid in 18 months.
Newell said the bond money would be soft-deposited May 12.
“Therefore the budget staff report for the end of May will look ‘different,’” Newell joked, referring to the district’s usual school budget graph. ”That chart’s going to have to be revised a little bit.”
[Bond sale financing summary (pdf)]
