LL bond sale better than expected

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The Los Lunas' general obligation bond sale went better than school officials expected, although it did not beat last year's interest rate of less than 2 percent. This year's general obligation bond sold for $6 million and carries a 2.74 interest rate.

The Los Lunas' general obligation bond sale went better than school officials expected, although it did not beat last year's interest rate of less than 2 percent. This year's general obligation bond sold for $6 million and carries a 2.74 interest rate.

"We were very pleased with the results of the sale," said Erik Harrigan of RBC Capital Markets. "We've been spoiled — we've had such low interest rates over the past several years, but interest rates have begun to pick up …"

The bond was sold to the Baker Group out of Oklahoma, which had the lowest of six bids. The highest interest rate was 2.94 percent.

The interest cost to taxpayers on this bond is about $1.3 million, but this is an expense the district factored into the $25 million GO bond and district expenditures at the time of the election. It will be paid out of property taxes voters approved to continue at the last election.

The district's credit rating hasn't changed. According to Moody's Investor Service, the district is rated as an Aa1 stable outlook, enhanced rating.

Moody's said the rating reflects the district's improving financial position following operating surpluses, a sizeable tax base with expectations for continued improvement, and a manageable debt profile.

The bond sale was also helped by the state's School District Enhancement program, which provides more security to investors buying New Mexico school district bonds.

The $6 million from the sale will be used to pay the final cost of the new Los Lunas High School, about $3.5 million, and about $2.5 million will be used to fund other school facility projects, such as playgrounds upgrades, heating and air-conditioning upgrades, asphalt repairs, fire alarm and PA system upgrades, plus the design phase of Peralta Elementary School's renovations.

The sale is the second in a series of four that were planned when the $25 million GO bond was approved by voters in February 2012.


-- Email the author at dfox@news-bulletin.com.