FOR IMMEDIATE RELEASE
Scott County Schools saves $2.3 million
On Thursday, August 25, 2016, Scott County Schools sold bonds worth more than $17 million. These bonds were used to refinance bonds originally issued in 2008 and 2009. This decision by Scott County Schools will save $2.363 million in debt service costs. Debt service are the funds used to make annual payments on existing facility project debt.
The selling of bonds allows districts to borrow money to fund school construction with a promise of repayment over a specified time period, generally 20 years. Refinancing bonds is comparable to refinancing the mortgage on your home to secure a lower interest rate and save money over time.
The interest rate on the new bonds is approximately 2.21%. Respectively, interest rates for the 2008 and 2009 bonds were as high as 4.375%. Scott County Schools and fiscal agent Hilliard Lyons constantly manages the district’s debt portfolio to take advantage of favorable interest rate conditions as illustrated by this cost saving measure. “The numbers came back even better than expected,” commented Randy Cutright, Director of Finance for Scott County Schools.
Superintendent Dr. Kevin Hub said, “In an effort to secure a better rate and a more competitive bond sale market, we took the advice of our experts with Hilliard Lyons and sought a separate Moody’s bond rating.” Scott County Schools received a Moody’s Investors Service bond rating of Aa3 and an issuer rating of Aa2. Both ratings are extremely high, better than the rating earned by the Commonwealth of Kentucky, and reflect the strong financial management of Scott County Schools as well as the robust economy of Scott County.
According to Greg Phillips, Managing Director with Hilliard Lyons, only two other school districts in Kentucky have a rating this high, Jefferson County and Hardin County. “This recommendation alone saved us nearly $90,000 and is reflective of what we expect to see moving forward with our partners at Hilliard Lyons,” said Hub.