Schools OK first sale of bonds

by Mike Lesko | reporter Published:

Streetsboro -- The school district sold $9.8 million worth of bonds Dec. 12 in the first stage in raising more money for the school facilities project, according to Mike Sudsina, the district's financial adviser.

The strategy is to raise money on interest on the bonds -- to sell the bonds "in an environment that allows us to get lower interest rates ultimately on the bonds we sell long-term," Sudsina said at the Dec. 12 Board of Education meeting.

The bond sale followed the passage of a bond issue in the November general election which will help pay for a new high school and updated facilities district-wide. The bond issue will raise about $38.7 million to upgrade the district's school buildings. The bond issue also will give the district access to $24 million in state money, which would go toward facilities improvements.

Sudsina said, according to state law, the first bond sale had to be completed by the end of the calendar year.

He said there will also be a $21.8 million bond note sale, "probably in the first week of January."

"That will give us the money we need to be able to sign the project agreement with the state to keep everything moving on the schedule [set up by the state]," he said.

"There are a lot of different dynamics that go along with the sale," Sudsina said. "One is the credit rating that goes along with the sale, [and] the credit rating that underlies the finances of an organization."

Sudsina said Streetsboro has an A-1 rating by Moody's, one of the top ratings possible.

"What also is very notable is, the market really hasn't changed much this month," Sudsina said. "It has been pretty flat, at least on the short-term rates."

Sudsina praised the investment banking firm, RBC Capital Markets, that sold the bonds.

"We're off to a great start," he said. "It was a really good start. There was a lot of interest in the notes."

Sudsina and he and Treasurer Catherine Rouse answered "a lot of questions from big investors who were trying to get their arms around [our] credit. These folks are in New York. One guy was in New Hampshire. They're from all around the country. They're not here to see what we're all about. We conveyed a little more color, not only about the community, but also the finances. We got all those answers cleared up, and it showed in the rating we got."

Email: mlesko@recordpub.com

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