Provo District issues school bonds
$25.6 million to finance construction, upgrades
The final portion was issued recently to underwriter LaSalle Financial Services Inc. of Oakland, Calif., which will find investors to purchase the bonds.
LaSalle Financial was one of eight underwriters to respond on an electronic market May 8, when the district sought a bid. LaSalle Financial won with the lowest interest rate, 4.22 percent, said Johnathan Ward of Zions Bank Public Finance, which helped the district facilitate the sale.
"I feel very, very good about (the rate) in this market," district business administrator Kerry Smith said.
The district will repay the debt in 20 years.
The $25.6 million will be used to pay for the construction of a new Timpanogos Elementary, which will be razed and rebuilt on its site on 500 West, and for an elementary in the Lakeview neighborhood that is under construction at 1390 N. 2860 West.
Weeks before the electronic bid, the Moody's Investors Service gave the district a bond rating of A1.
The highest bond rating attainable from Moody's is AAA, Smith said, and ratings lower than B are considered junk bonds.
But working to the district's benefit are new management and accounting practices that "reversed the district's negative financial trend through cost-cutting measures," the report said.
To save money, the district closed Joaquin Elementary and turned Farrer Middle School into an elementary school — actions that upset many local residents.
The A1 bond rating is the same rating the district received in September when it issued the first $9.4 million portion of bonds for energy upgrades and building improvements at existing schools.
In June 2006, voters allowed the district to issue $35 million in bonds for the projects. Property taxes on a $200,000 house will increase over the next three years to $82.
E-mail: lhancock@desnews.com
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