§ 102511 Refunding Bonds Issuance

This law lets the board sell new refunding bonds to pay off old district bonds, and the board can decide the details without needing a public vote.

Key Takeaways

•The board can issue refunding bonds whenever it decides.
•No public election is needed to approve the refunding bonds.
•The board chooses how the new bonds are exchanged for the old ones.
•Refunding bonds can cover all or just part of the old bond debt, plus interest, premiums, and costs.

Example

A school district has $5 million of old bonds that cost a lot of interest. The board decides to issue new refunding bonds to replace the old ones and save money.

The board can sell new bonds, use the money to pay the old bond’s principal, any interest that’s due, any extra premium, and the costs of doing the swap. No public election is required; the board just decides how the exchange works.

How to Calculate

Total refund amount = Principal of outstanding bonds + Interest due + Premiums (if any) + Refund expenses

Find the principal amount of the old bonds you want to retire.
Add any interest that is owed on those bonds up to the redemption date.
Add any premium that must be paid because the bonds are being called early.
Add all costs needed to do the refunding (legal fees, printing, etc.).
The sum is the amount of new refunding bonds you need to issue.

The district wants to refund $8 million of old bonds.

Result: Total refund amount = $8,000,000 + $120,000 + $30,000 + $50,000 = $8,200,000

The board may provide for the issuance, sale, or exchange of refunding bonds to redeem or retire any bonds issued by the district upon the terms, at the times and in the manner which it determines. Refunding bonds may be issued in a principal amount sufficient to pay all, or any part, of the principal of such outstanding bonds, the interest thereon and the premiums, if any, due upon call and redemption thereof prior to maturity, and all expenses of such refunding. The provisions of this article for issuance and sale of bonds apply to the issuance and sale of such refunding bonds; except that (a) no election need be called or held for the purpose of authorizing the issuance of refunding bonds, and (b) when refunding bonds are to be exchanged for outstanding bonds the method of exchange shall be as determined by the board. (Added by Stats. 1971, Ch. 1374.)

This law lets the board sell new refunding bonds to pay off old district bonds, and the board can decide the details without needing a public vote.

Key Takeaways

•The board can issue refunding bonds whenever it decides.
•No public election is needed to approve the refunding bonds.
•The board chooses how the new bonds are exchanged for the old ones.
•Refunding bonds can cover all or just part of the old bond debt, plus interest, premiums, and costs.

Example

A school district has $5 million of old bonds that cost a lot of interest. The board decides to issue new refunding bonds to replace the old ones and save money.

How to Calculate

Total refund amount = Principal of outstanding bonds + Interest due + Premiums (if any) + Refund expenses

Find the principal amount of the old bonds you want to retire.
Add any interest that is owed on those bonds up to the redemption date.
Add any premium that must be paid because the bonds are being called early.
Add all costs needed to do the refunding (legal fees, printing, etc.).
The sum is the amount of new refunding bonds you need to issue.

The district wants to refund $8 million of old bonds.

Result: Total refund amount = $8,000,000 + $120,000 + $30,000 + $50,000 = $8,200,000

Key Takeaways

Example

How to Calculate

Key Terms

References

§ 102511 Refunding Bonds Issuance

Key Takeaways

Example

How to Calculate

Key Terms

References

Key Takeaways

Example

How to Calculate

Key Terms

Related Statutes

References

Key Takeaways

Example

How to Calculate

Key Terms

Related Statutes

References