Just a little more than a month after Trenton voters approved a $57.1 million bond issuance for school updates and improvement, the process took a big step forward June 12 when Trenton Public Schools announced the successful completion of its bond sale.
In preparing to sell the 2018 School Building and Site Bonds, the district, working with its municipal advisor, PFM Financial Advisors LLC, requested that S&P Global Ratings, acting through Standard and Poor’s Financial Services LLC, evaluate the district’s credit quality.
Consequently, S&P assigned the district the underlying rating of “A+” with a stable outlook. The rating agency cited the district’s budgeting practice and board policies in generating and maintaining an adequate fund balance for their rationale for providing the rating.
The bond process was conducted by the Michigan investment banking office of the brokerage firm Stifel, PFM Financial Advisors and the law firm of Miller Canfield Paddock & Stone PLC, which is serving as bond counsel.
The district’s bonds were sold at a true interest rate of 4.06 percent with a final maturity of 2048 (a repayment term of approximately 30 years).
“Trenton Public Schools’ Bonds were well received by the bond market,” said Brodie Killian, managing director with Stifel. “We had participation from a cross section of investors and were able to take advantage of current low interest rates that met the goals of the district.”
The full cost of the bond process encompasses $50,630,000 million as the par value of the cost of improvements with the remainder allocated for associated costs, including premiums, underwriter costs and issuance expenses.
The improvement funds will be used for the purposes of remodeling school district buildings and classrooms, including classroom improvements, roof replacements, mechanical and security improvements; furnishing, refurnishing, equipping and re-equipping school district buildings, including musical instruments, improving and developing sites, including traffic flow, signage, structures, fencing, sidewalks, playgrounds, parking lots, outdoor athletic facilities and other improvements in the school district; constructing additions to existing school district buildings, including a new high school pool; classrooms and flexible learning spaces; expanding and improving cafeterias, gyms, media centers, constructing a new facilities and maintenance building; acquiring and installing technology infrastructure and equipment, including security technology and instructional technology equipment for students.