Seneca Valley Could Save More Than $400,000 by Refinancing Bond

The district will consider refinancing a bond taken out in 2003 at a lower interest rate.

Seneca Valley could see savings of more than $400,000 by refinancing a bond taken out in 2003.

Lynn Burtner, the district business manager, said the district owes $8.86 million, plus interest, on the bond, which is due to be paid off by 2017.

However, the bond is available to be refinanced at a lower interest rate on July 1, 2013, she said.

By refinancing, Burtner said the district could lower the interest rate from 3.5 percent to less than 1 percent. She recommended spreading out the estimated savings of more than $400,000 over the next three to four years.

The school board is expected to vote at their next meeting at 8 p.m. Monday, Feb. 11 on whether to move forward with the refinancing process.

If all goes according to plan, the district could close on the new lower interest rates by April.

The district typically considers refinancing when there’s a chance of saving 2 percent or more on the amount it owes. District bond counsel Robert Aumer, of Janney Montgomery Scott LLC, said refinancing the 2003 bond would save the district about 5 percent.

Burtner added the district constantly exams ways to take advantage of lower market rates.

“We always take opportunity to refinance when possible,” she said.

She added two more bonds are expected to become eligible for refinancing in 2015.

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