Purdy School Board signs $525,000 lease purchase
The sale of $525,000 in lease certificates have been authorized by the Purdy R-2 Board of Education to finance the current construction project.
The $1.045 million project includes a facelift on the exterior entrance to the gym, expanding the cafeteria, adding a new library and restrooms for public use during sports events, as well as other improvements. The balance of funds are coming from the district's capital improvements account. The general contractor is Bales Construction of Springfield.
According to Larry J. Hart, president and CEO of the investment banking firm of L.J. Hart and Company, two local banks acquired nearly half of the certificates. Community National Bank in Monett purchased $150,000 worth and First State Bank of Purdy acquired $105,000 in certificates. Local individual investors subscribed to the remaining $270,000 of certificates.
Dr. Steven Chancellor, Purdy superintendent, said he was pleased investors from within the Purdy community and surrounding area had the opportunity to secure the certificates and that all were sold locally.
"It is nice that our marketing procedures facilitated this local involvement while still receiving attractive interest rates," he said.
The school board selected the negotiated sale of certificates in order to capture current market conditions, thus getting the latest rates in the municipal bond market. Chancellor said the district compared proposed interest rates with the national bond indexes and other comparable Missouri issues.
"Based upon pricing of these other A-rated financings on March 3, the date firm rates were proposed to the district for its non-rated financing, our cost was much lower than the national index for an A-rated lease financing," Chancellor said.
The certificates are scheduled to mature on March 1, 2015 through March 1, 2029 with re-offered yields ranging from 2 to 4 percent. The total interest expense is consistent with the original projections. Certificates contain an optional repurchase provision on March 1, 2019, at no penalty that will facilitate the reduction of future interest expense in the event of pre-payment or a future refunding to lower rates if market conditions make it economically feasible.
The financing proceeds are expected to be available to the district by March 12. Funds will be promptly reinvested by the district to earn additional interest for use in the completion of the projects.