Wichita Board Of Education Rushes To Refinance Bonds Before Deadline
Wichita's Board of Education voted Monday to start the process of refinancing some of USD 259's bonds. The move could save the district more than $4 million, but only if they can pull it off before the end of the year.
The school board is working with investment banking firm George K. Baum & Company. According to one of the firm's vice presidents, Steve Shogren, the process usually takes two months.
"You're probably pretty good with calendars," he said Monday during a special school board meeting. "We don't have 60 days before the end of the year. So we're going to need to expedite."
The reason for the rush: federal tax reform. Shogren says both the U.S. House and Senate bills would make the refinancing effort impossible until 2020.
"And who knows what interest rates will be three years from now?" Shogren said.
Another problem: Insurance companies, financial advisors and other groups are likely to be trying to beat the end-of-year deadline as well. That could lead to less savings.
"There are only so many dollars," Shogren said. "If we have a glut of other issuers trying to take advantage of this small window, we may have more bonds than usual in supply than we have demand for."
If refinancing fails to meet the district's savings target, George K. Baum & Company will cancel the process.
The board voted 5-0 to approve the motion. Joy Eakins was absent for the vote. Board members will receive an update during their Dec. 11 meeting.
Follow Stephan Bisaha on Twitter @SteveBisaha.
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