School Board Plans to Refinance $35 Million

The Bethlehem Area School District Authority will meet at 6 p.m. in Room 506 at prior to the regular school board meeting to authorize the refinancing a 2010 floating note in the amount of $30 million.

Additionally, it has been announced the school board will be introducing a resolution to refund and refinance $4.915 million in Series A 2001 bonds to take advantage of better market conditions at its meeting, scheduled for 7 p.m. in the auditorium following the Authority meeting.

Both moves are consistent with and follow the school district's plan to improve its financial standing, said Scott Shearer, managing director for the district's financial advisor, Public Financial Management Inc.

“As of today, you have about $100 million left in swap options,” Shearer told the school board's finance committee last Monday evening. “Of the $100 million of swaps you have outstanding, $70 million we have completely eliminated basis risk and tax risk. So we've substantially reduced that risk.”

He added, “You're a lot closer to where you were five or six years ago.”

A total of three swaps remain, two at $30 million apiece, and one for $40 million.

As market conditions are ripe, the district will likely want to rid itself of the final three in favor of more stable options, Shearer said.

“The goal is to keep shedding that at opportune times,” he said.

Shearer estimated the $30 million remarketed loan will be complete by mid-December, and the refinancing of the $4.915 million bond will be settled by early to mid January of 2012.