The Board of Education of the Cassville R-IV School District in Barry County, at a regular meeting on July 25, approved the sale of $9 million in General Obligation Bond Issue to its Municipal Bond Underwriter, L.J. Hart & Company of St. Louis.
‘We appreciate the strong vote of confidence we received from local patrons at the election and want to lock in interest rates that are still favorable in the current rate environment,’ said Jeremy Marple, president of the Cassville Board of Education.
These new money General Obligation Bonds were approved by 63 percent of the voters at the April 4 municipal election for the purpose of providing funds for a new Performing Arts Center, energy improvements, and safety upgrades.
The bond marketing process provided the first opportunity to local financial institutions to invest, and according to Courtney Wegman, Vice President of L.J. Hart & Company, Freedom Bank of Southern Missouri purchased $250,000 of the bonds. This local support was helpful to the success of the financing.
“It is nice that our marketing procedures facilitated this local involvement while still receiving attractive reoffered yields,” said Merlyn Johnson, superintendent of Cassville.
The Board of Education selected the negotiated sale of the bonds in order to capture current market conditions, to be certain that local banks received an opportunity to purchase the bonds, and because the proposed interest rates and yields were fair based upon current conditions in the municipal bond market.
Johnson said the district did compare proposed interest rates with the national bond indexes and other Missouri issues with a similar rating quality sold at competitive and negotiated sales to be certain that rates for the district’s bonds were favorable.
“Based upon pricing of these other financings, and the national indexes 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 quality level of bond issue,” Johnson said.
The information shared by L.J. Hart & Company indicated that the bonds are scheduled to mature on March 1, 2032, through March 1, 2043, with reoffered yields ranging from 3.50 percent to 4.10 percent, which produces additional funds for the projects in the amount of $322,701.50. The interest income from the bonds is exempt from federal and state of Missouri income taxes and the bonds were available in $5,000 denominations.
These bonds carry a ‘AA+’ rating from S&P Global due to the district’s participation in the State of Missouri Direct Deposit Program coordinated through the Missouri Health and Educational Facilities Authority.
The bonds do contain optional redemption (call) provisions on March 1, 2028, 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 were made available to the district on Aug. 16 and were promptly reinvested by the district to earn additional interest for use in the completion of the projects.
CS Bank was approved to hold these bond funds. The legal documents to complete the issuance of the bonds were prepared by Lori Lea Shelley, Esq. of Lathrop GPM in its role as bond counsel for the district.
