NEW CASTLE —
The New Castle school district will save about a half-million dollars by refinancing a bond issue from 2006.
At its meeting last week, the board unanimously approved a resolution to proceed with the refinancing at the recommendation of its bond counsel and financial adviser. However, the resolution specified the refinancing would not proceed unless the savings is $165,000 or greater.
Tuesday morning, district business administrator Joseph Ambrosini said final figures were not available, but the savings to the district will be around $500,000.
According to Ambrosini, approximately $300,000 will be paid to the district up front, while the reminder will be spread out over the period of the 20-year bond. The savings, Ambrosini said, will be used to reduce the district’s debt service payments.
The district had floated four bond issues for $10 million each in 2006 for the junior-senior high school project, and the bond being refinanced is one of those, Ambrosini explained. That one was a 2003 bond that had been refinanced in 2006.
The most recent interest rate in the 2006 bonds was 4.4 percent, and the rate after refinancing will be around 3.85 percent, he said.
The school board resolution was in place after the district learned it has an A-stable rating.
“That means it’s pretty solid,” Ambrosini said, noting at about 90 percent of the 500 school districts in Pennsylvania have an A rating.
Superintendent George Gabriel also said the savings will be applied to the debt service.
“Our plans are to use these proceeds to pay down debt.”
The district’s bond counsel is Patrick S. Healy of the Cohen and Grigsby firm of Pittsburgh.
The underwriter or financial adviser is Joseph Muscatello of Boenning and Scattergood Inc. of Pittsburgh.
Both men advised the school board about the refinancing at its public work session Jan. 16.
(Email: dmorris@ncnewsonline.com)
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