Local investors will soon have the opportunity to purchase tax-exempt bonds from the Lake Washington School District (LWSD).
The sale comes after district voters approved a $398 million, 20-year bond in April to build new schools to accommodate growth.
Barbara Posthumus, director of business for LWSD, said when the bond passed, that gave the district the authority to sell bonds and this is just the first of three phases of them doing just that.
This first phase will include about $165 million of funds. In addition, the sale will also include the refinancing of previously sold, unlimited tax general obligation bonds at lower interest rates. Posthumus said this will save taxpayers money.
“We are aiming to take advantage of historically low market interest rates for the bond projects and to deliver savings to our taxpayers with the refinancing,” she said in an LWSD press release.
According to the release, the district plans to provide local taxpayers with an opportunity to “invest locally” by purchasing some of the tax-exempt bonds.
Posthumus said this is the first time she can recall the district offering this to local investors, adding that the opportunity was born out of the fact that the last time LWSD passed a bond, people inquired about the possibility of purchasing bonds.
Typically, the district sells the bonds to institutional investors such as pension funds, with companies from all over the country, she said.
The LWSD press release states that the current offering for local investors is made only by the preliminary official statement, which will be made available by the underwriters and the district. The interest rates and taxpayer savings are expected to be finalized on or about Aug. 9.
Kathryn Reith, communications director for LWSD, said the district won’t be able to provide specific returns for investors until after this date.
According to the district release, Moody’s Investors Service has assigned its “AAA” credit rating to the bonds, the highest rating possible. S&P Global Ratings (formerly Standard & Poor’s Ratings Services) assigned the district’s existing “AA+” rating to the bonds. The rating agencies cited such factors as balanced budgetary performance, the large tax base, growing enrollment and good management policies and practices as positive credit factors supporting the ratings.
D.A. Davidson & Co. in Seattle is serving as senior managing bond underwriter for the transaction and Northwest Municipal Advisors is serving as the district’s municipal financial advisor.
For more information about the bonds or to obtain a copy of the preliminary official statement, contact D.A. Davidson’s Redmond office at (425) 497-3416.