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June 16, 2017 10:25:25 AM
The Columbus Municipal School District plans to refinance its debt from 2009 general obligation bonds used to fund construction of Columbus Middle School, according to board of trustees president Jason Spears.
The move could ultimately save CMSD roughly $300,000 over the next seven years, Spears added.
In a called meeting Thursday morning at Brandon Central Services, the board hired a special counsel team that would help restructure the district's debt. The team will include Columbus' Dunn and Hemphill as issuer's counsel, Jackson-based firm Young Law Group as bond counsel, The Stephens Group of Little Rock, Arkansas, as underwriter and Jackson-based MuniGroup as municipal adviser.
According to Spears, the newly assembled team will explore all possible refinancing options over the next four to six weeks, focusing on lowering CMSD's bond debt interest rate and restructuring the district's payment schedule.
CMSD's 2016 financial audit report said the current interest rate for the 2009A bond falls between 3.1 and 4.4 percent each year, and the district's current payment schedule would result in a total payoff of roughly $9.6 million, including interest, by 2024.
Spears said the district has payed between $7 million and $8 million since 2010.
"We have been reviewing and searching for options in working to pay our debt," Spears said. "Recent developments in the bond and interest rate markets have provided opportunities to refinance and restructure our debt in more favorable terms."
Spears also said the district will have three other bonds repaid by 2019, making the 2009A general obligation bond payments "more doable."
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