2013 Bond Refinanced

2013 Voter-Approved Bond Refinanced
Posted on 11/30/2023

$6.5 million saved over 10 yearsIn August 2023, the Tahoma School Board authorized Tahoma’s finance department to move forward with refinancing a portion of the 2013 voter-approved bond package (sold as separate bonds in 2013 and 2015), which was used to construct a new Tahoma High School and Lake Wilderness Elementary School, along with equitable warm, safe, dry improvements at all campuses.

TSD proposed the sale of its outstanding bonds to investors on Oct. 3, 2023, and sold all $72 million worth of its bonds within an hour and a half. Various investors made offers to purchase upwards of $200 million worth of bonds—roughly three times the amount our district had available to sell. This is a testament to the trust investors have in the stability and responsibility of Tahoma School District’s financial management and the perceived ability of our community to repay the bonds.

In preparation for the refinance, TSD maintained its Aa2 Moody’s credit rating, which represents fixed securities, like bonds, that are of a high quality and very low credit risk. This is the third highest credit rating assigned by Moody’s to fixed securities, and the highest possible credit rating for a district of our size. The sale was also backed by the Washington State School Bond Guarantee with a “Aaa” rating, which is the strongest bond rating possible.

As a result of the strong financial position of TSD and the high demand for purchase of these bonds, the bond sale led to a new interest rate of 3.7%, down from its previous interest rate of 5.0%. 

While there are no cash inflows associated with the reduction in interest rate, the new rate will result in an average savings of $0.055/$1,000 of assessed property value for district taxpayers. For an average homeowner in TSD boundaries whose property is worth $750,000 today, this translates to an average savings of approx. $430 in property taxes over the life of the bond, which will be paid off in 2033. 

Learn more about Tahoma School District finances at our Budget 101 page.

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