Fremont, Calif., April 27, 2021—The Ohlone Community College District recently locked in savings of $8 million for local taxpayers by refinancing existing general obligation bonds. The District had similarly refinanced prior bonds from 2010 through 2019, which saved taxpayers over $29.1 million. The combined savings from all of the refinancing now totals over $37.1 million, which will be realized by District taxpayers in the form of lower property tax bills.
“This bond refinancing reaffirms Ohlone’s continued commitment to be good stewards of public funds and to take every opportunity possible to reduce interest payments by the taxpayers,” says Superintendent/President Dr. Eric Bishop. “The Ohlone Community College District and the Board of Trustees is very appreciative of the support we receive from taxpayers and it’s great to have the opportunity to pass back savings.”
The District took advantage of historically low interest rates and replaced bonds with an average interest rate of 4.08% with new bonds at all-inclusive interest rate of 2.87%. This interest rate reduction of 1.21% was achieved without any extension of the original repayment term.
Prior to the bond sale, the District received an affirmation of its strong ‘Aa1’ Moody’s credit rating (one notch from the highest possible rating of ‘Aaa’). In its credit report, Moody’s noted the District for its large and growing tax base, strong wealth and income indicators, stable financial position, and management’s strong forecasting and budgetary practices. This high-grade credit rating helped attract a broad investor base which included insurance companies, money managers, banks, and bond funds.
“We are thrilled to have significant investor interest in Ohlone College and to again save taxpayer dollars,” said Dr. Chris Dela Rosa, Vice President of Administrative and Technology Services.
While the District had approximately $70 million in bonds to sell, it received investor orders in excess of $400 million (5.7x subscription). The timing of the bond refinancing coupled with the good fiscal stewardship of the College contributed to the over subscription.