MACON COUNTY R-I SCHOOL DISTRICT, MISSOURI APPROVES SALE OF $4,250,000 LEASE FINANCING
The Board of Education of the Macon County R-I School District, Missouri at a regular meeting on April 26, 2018 approved the sale of $4,250,000 Lease Certificates of Participation to its Municipal Bond Underwriter, L.J. Hart & Company of St. Louis, Missouri. These certificate proceeds will be used to construct an elementary addition which will include a library. The revenue source for the repayment of these certificates is the 39 Cent operating levy approved by the voters at the November 7, 2017 election.
According to Larry J. Hart, Chairman and CEO of L.J. Hart & Company, the Macon-Atlanta State Bank purchased $310,000 of the certificates. The certificates were also offered to the local institutional investors. The Board of Education selected the negotiated sale of the certificates in order to capture current market conditions, to be certain that local individual investors and banks received an opportunity to purchase the certificates, and because the proposed interest rates were fair based upon current conditions in the municipal bond market.
According to L.J. Hart & Company, the certificates are scheduled to mature on April 15, 2024 through April 15, 2033 with reoffered yields ranging from 2.50% to 3.75%. The District is also selling $1,485,000 of certificates with an interest rate of 3.00% to yield ranging from 2.50% to 2.85% to the April 15, 2023 call date. By selling these certificates at premiums, an additional $22,511.05 of funds were generated to cover a portion of the costs of issuance.
The certificates carry an “A” rating from Standard & Poor’s Corporation and the District has an “A+” issuer credit rating from S&P based on evaluation of its overall credit worthiness, which is an investor grade. The certificates do contain an optional redemption (call) provision on April 15, 2023 at no penalty that will facilitate the reduction of future interest expense in the event of prepayment or a future refunding to lower rates if market conditions make it economically feasible. The financing proceeds are expected to be available to the District by May 15, 2018 and will be promptly reinvested by the District to earn additional interest for use in the completion of the projects. The legal documents to complete the issuance of the certificates were prepared by Lori Lea Shelley, Esq. of Mickes O’Toole, LLC in its role as special tax counsel for the District.
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