St.Vrain Valley School District RE-1J achieved a credit rating upgrade from Standard & Poor’s from “AA” to “AA+” and issued the remaining $60.34 million of bonds from its $260.34 million of voter authorization in 2016. The sale on September 19 was for a 5-year bond maturity, shortened from what was initially planned to be a 14 year schedule. The shorter repayment term was made possible by growth in the tax base of the school district since 2016, a contribution of fund balance dollars, and the fact that interest rates had recovered from the spike in rates that occurred after the 2016 election. The Series 2018 bonds carried yields of 1.72 percent to 2.21 percent, which combined with the rates locked in at the time of the sale of the initial $200 million in December 2016, provided a net interest cost of 3.57 percent for the full issue.
“We did very well investing the first $200 million in new and upgraded facilities and were able to hold off on the sale of this remaining piece of the bonds until we were prepared to finish the remaining projects. We recognized the lack of other high-quality issues in the Colorado marketplace over the summer and were able to get investors to focus on our issue before bonds that might be approved in November 2018 were available,” said St. Vrain’s Chief Financial Officer, Greg Fieth.
The rating upgrade to “AA+” from Standard & Poor’s recognized the District’s:
- very strong financial profile
- meticulous capital spending
- conservative budgeting approach
Thanks to the support of our teachers, staff, and community, there is no school district in the state of Colorado that has a higher S&P credit rating.
“Because St. Vrain Valley Schools’ assessed valuation increased by 7 percent due to an unanticipated rebound in Weld County oil and gas values and new residential construction, Greg Fieth and his financial team saw that keeping the mill levy at the same rate for 2019 would allow the bonds to be paid back in a much shorter timeframe,” said Denver based bond underwriter George K. Baum’s executive vice president Todd Snidow. “Shortening the repayment period to only 5 years on the Series 2018 bonds saves local taxpayers over $12 million in interest expense,” said Snidow.
“Now that the final piece of the 2016 bond authorization has been sold, we can compare the ballot numbers that voters approved to our final results and are proud to report that the total amount of principal and interest to be repaid on these bonds until their final maturity in 2036 is over $21 million less than voters approved in 2016,” said Fieth. “We are grateful that our community has allowed us to address the District’s growth in a timely and cost-effective manner,”
Superintendent Don Haddad remarked “We take our fiduciary responsibilities to our community very seriously and are pleased that our forward planning and fiscal diligence have created excellent facilities and savings for our taxpayers.”