District 113 Refinances Debt to Save Money

District 113 successfully refinanced a portion of its debt on Tuesday, May 8th thanks to a one-time tax exemption from the Internal Revenue Service, saving the school system more than $515,000.

“Just like residents look for ways to refinance debt on their homes, District 113 constantly looks for ways to save on debt we hold,” Barry Bolek, Assistant Superintendent of Finance, said.

District 113 recently took advantage of a one-time advance refunding option for government entities. District 113 was able to take $7.6 million of its debt and create two new refunding bond issues at much lower interest rates. Interest rates on the refunded bonds averaged 3.90% and were refinanced at a true interest cost of 1.99%.

The total savings from the move amounts to $515,000 which will directly relate to the District’s interest payments on bonds. “Over the next 14 years we will be levying lower dollars due to the reduced debt service,” Bolek explained. “Our levy will be approximately $20,000 lower each year.”

Thanks to the refunding, the District will lower its debt payments by an additional $20,000 for each of the next ten years because of refinancing debt that is paid out of its operating funds.

District 113 worked with its financial advisor, PMA Securities, Inc. and local underwriter, Mesirow Financial, to secure the debt restructuring.