An Ohlone Community College Press Release:
The Ohlone College District announced that it has locked in significant savings of approximately $8.3 Million for local taxpayers by refinancing a portion of its Measure A (2002) General Obligation Bonds.
The district took advantage of historically low interest rates by replacing $92.85 million in bonds at an average interest rate of 5 percent with new bonds at an all-inclusive interest rate of 3.24 percent.
All of the savings from the refinancing were achieved as a result of these lower interest rates and through the use of current interest bonds.
These savings will be realized by district taxpayers in the form of lower property tax bills over the next seventeen years, beginning with the 2013-14 property tax bill.
Prior to the refinancing, Moody's and Standard & Poor's assigned the district very strong credit ratings of 'Aa2' and 'AA', respectively.
Given the recent down turn in the economy and the state of California's persistent budget crisis, maintaining this rating is a significant accomplishment for the college.
Moody's and Standard & Poor's both noted the district's sound financial profile and conservative fiscal practices in the face of the challenging funding environment for all California community college districts.
Ohlone has been monitoring the market on a regular basis since February to gauge an optimal savings level.
This past spring, Ohlone's Board of Trustees preauthorized the sale, allowing the district to enter the market quickly when the desired savings threshold was achievable, resulting in the recent sale.
The district previously refinanced a separate portion of its Measure A (2002) General Obligation Bonds in September 2010, saving taxpayers nearly $3.5 million in that effort.
Combined with the savings from this week's refinancing, the total savings achieved for district taxpayers is $11.8 million.