BHUSD Refinances $42 Million in Measure K Bonds

The Beverly Hills Unified School District Board of Education has concluded the refinancing of almost $42 million in existing bonds, saving city taxpayers more than $2 million, a senior district official said Wednesday.

“Today’s successful bond refinancing is a huge accomplishment for our district...it will reduce the tax rate and the total debt service paid by our residents,” BHUSD Superintendent Gary Woods said in a statement.

The district was able to replace $41.645 million in bonds at an average interest rate of 4.97 percent with new bonds at an all-inclusive interest rate of 3.25 percent, according to a BHUSD statement. The lower interest rate the district is now paying for the bonds will save Beverly Hills taxpayers $2.6 million, the statement said.

The school board  to approve the issuance of 2012 general obligation bonds to refinance Measure K bonds, so long as the savings to taxpayers totaled at least $2 million. There is $42.7 million in outstanding bonds that were issued as part of the $90 million Measure K bond, which was approved by voters in 2002.

BHUSD bond consultant Keygent Advisors had recommended that the district move quickly to take advantage of current low interest rates to pay off some Measure K bonds. Keygent also advised BHUSD to use JP Morgan Chase to underwrite the bonds. The board agreed to  after considering alternative bond proposals from other investment banks.

A helped the district obtain low interest rates on the bonds. Earlier this month, the nation’s two major credit rating agencies both reaffirmed the BHUSD’s high credit rank. Standard & Poor’s maintained a “AA” score for the district, one step below its top rating of “AAA.” Moody’s Investors Service kept the district’s rating of “Aa1,” one step below the agency’s top rating of “Aaa.”

Editor's Note: This article has been changed to reflect that the top rating for Standard & Poor’s is “AAA,” not “AA+.”

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