THAYER -- The sale of $3.1 million general obligation bonds by its municipal bond underwriter, L.J. Hart & Company of St. Louis was approved by the Thayer School Board of Education Feb. 13.
"We appreciate the vote of confidence we received from local patrons at the election and want to lock in interest rates that are highly favorable," said Noval Willbanks, president of the board of education.
The new general obligation bonds were approved by the voters at the Nov. 5 election to provide money for constructing, equipping and furnishing a new elementary school.
According to Hart, the Bank of Thayer purchased $445,000 and the Bank of Alton bought $1.05 million of the bonds to support the school district.
Thayer Superintendent Bill Garrison mentioned that he and the school board were pleased efforts were made to accommodate local investors.
"It is nice that our marketing procedures facilitated this local involvement while still receiving attractive interest rates," Garrison commented.
The Board of Education selected the negotiated sale of bonds in order to capture current market conditions, to be certain that local investors and banks received an opportunity to purchase the bonds, and because the proposed interest rates were fair based upon current conditions in the municipal bond market.
Garrison said the district did compare proposed interest rates with the national bond indices and other comparable Missouri issues and those of other states with a similar rating quality sold at competitive and negotiated sales to be certain that rates for the district bonds were favorable.
"Based upon pricing of these other financings on Feb. 5 the date firm rates were proposed to the district and the national indices for AA rated general obligation bonds our rates were as good as or better than some public sales and other negotiated sales for a similar quantity level of bond issue," said Garrison.
According to L.J. Hart & Company, the bonds were scheduled to mature from March 1, 2005, through March 1, 2023, with reoffered yields ranging from 1.55 percent to 4.75 percent with the total interest expense coming in below the original projections.
The interest income from the bonds is exempt from federal or state of Missouri income taxes and the bonds were available in $5,000 denominations.
These bonds carry a AA+ rating from Standard & Poors Corporation due to the district's participation in the State of Missouri Direct Deposit Program coordinated through the Missouri Health and Educational Facilities Authority. This program makes it possible for the district to receive reimbursement from the state of Missouri for some of its costs of issuance if the Missouri General Assembly restores full funding to the Direct Deposit Program in the 2003 legislative session.
The bonds do contain optional redemption (call) provisions of March 1, 2008, at no penalty that will facilitate the reduction of future interest expense in the event of prepayment.
The financing proceeds are expected to be available to the district by March 5 and will be promptly reinvested by the district to earn additional interest for use is the completion of the project.
The legal documents to complete the issuance of the bonds were prepared by John W, Brickler, Esq. of Blackwell Sanders Peper Martin LLP in its role as bond counsel for the district.