With interest rates at historically low levels, and at the direction of the Board of Education, the Placentia-Yorba Linda Unified School District (PYLUSD) has successfully issued its 2021 Series A and B General Obligation (GO) Refunding Bonds. Remarkably, this action will save local property tax payers approximately $71.5 million over the life of the bonds without extending the term of the original bonds. The savings were generated by issuing refunding bonds at lower interest rates to repay the existing bonds, similar to refinancing a mortgage at a lower rate.
“The district continues to follow the Board’s direction in actively managing outstanding GO bond debt to ensure the community’s hard-earned dollars are maximized,” shared Assistant Superintendent of Business Services, David Giordano. “This has and will continue to be our commitment to the community.”
Wall Street bond rating agency, Moody’s Investors Service, upgraded the Placentia-Yorba Linda Unified School District’s high rating in regards to the issuance and assigned a positive outlook with a rating of Aa2, up from Aa3 in 2019. Concurrently, Moody’s upgraded the district’s issuer rating, general obligation, and Certificates of Participation (COP) ratings one notch to Aa3 from A1, Aa2 from Aa3, and A1 from A2, respectively. In addition, Standard & Poor’s (S&P) maintained the district’s strong AA- GO bond rating and A+ COP rating. They have also assigned a positive outlook on the rating, indicating the improvements the district has made to its financial operations and reserves. Both firm’s credit committee recognized PYLUSD for strong financial management, particularly while the COVID-19 pandemic still presents a degree of uncertainty, and declining enrollment and increased cost pressures continue to be faced by school districts throughout California.
This is not the first savings that the district has achieved for its bond program. Two years ago, the district went through a similar process, but instead issued the 2008 Series C GO Bonds, generating a savings of $7.2 million for Placentia-Yorba Linda Unified School District local property tax payers.