West Ottawa refinances portion of 2014 bond to save money

Mitchell Boatman, The Holland Sentinel
·2 min read

HOLLAND TWP. — West Ottawa Public Schools is taking advantage of low interest rates to save money in its repayment of bonds.

The district recently closed on a move to refinance a portion of the debt from the 2014 bond, with projected savings of more than $8.8 million. The 2021 refunding bonds will replace a bond issue from 2014 and will have a lower interest rate and accelerated payment table to create savings.

West Ottawa Public Schools recently closed on a bond refinancing that will save millions through lower interest rates and accelerated payment timelines.
West Ottawa Public Schools recently closed on a bond refinancing that will save millions through lower interest rates and accelerated payment timelines.

“We were able to take advantage of a low interest rate climate,” said Jeff Malloch, assistant superintendent of business services at WOPS. “A lot of that savings was captured in accelerating the payments and there was a lot of interest savings as well.”

The 2014 bond series that was refinanced had interest rates ranging from 3.25 to 5 percent. The 2021 refunding bonds have yields or yields to maturity ranging from 0.27 to 1.06 percent. Malloch wrote that the total gross savings is $8,837,032.

The district’s bond rating was reviewed by S&P Global Ratings as part of the process. West Ottawa was rated as a “AA-,” just one step below the state’s credit rating of “AA.”

“The state has phenomenal credit, and West Ottawa is just one step below the state’s credit rating,” Malloch said. “It makes us able to issue non-qualified debt, because we have such a strong underlying rating. The district is seen as a very safe investment for bond holders.”

West Ottawa Board President Kate McCoy, left, Superintendent Tim Bearden, center, and Board Secretary Mary Remenschneider listen during a meeting June 28, 2021.
West Ottawa Board President Kate McCoy, left, Superintendent Tim Bearden, center, and Board Secretary Mary Remenschneider listen during a meeting June 28, 2021.

West Ottawa also issued new building and site bonds stemming from the 2014 and 2019 approved bonding proposals. The new issues totaled around $60 million.

Part of the new issuance was the final series from the 2014 bond, totaling $24.5 million. The district also issued an additional $35.1 million from the 2019 bond authorization.

“This is the last go for the 2014 bond. All of that authorized debt has now been issued,” Malloch said. “All of that 2014 bond construction should wrap in the next couple years.”

He added that there is about $30 million left to be issued from the 2019 bond, most of which will go toward the district’s new elementary school.

A photo of construction progress at the new West Ottawa athletics stadium taken during summer 2021.
A photo of construction progress at the new West Ottawa athletics stadium taken during summer 2021.

Major projects ongoing in the district include design for the new elementary school and construction at the new athletics complex and performing arts center. Site improvements will also be done at Woodside, Lakeshore, Great Lakes, Waukazoo, Lakewood, Harbor Lights and West Ottawa High School South.

— Contact reporter Mitchell Boatman at mboatman@hollandsentinel.com. Follow him on Twitter @SentinelMitch.

This article originally appeared on The Holland Sentinel: West Ottawa refinances 2014 bonds to save money