Oswego School District hopes to save at least $4.5 million through refinancing $88 million bond issue

Oswego School District 308 hopes to save at least $4.5 million by refinancing a $88 million bond issue.

The district’s 2016 bonds, which represent approximately $88 million of the district’s total $185.5 million in outstanding principal, become callable on Feb. 1, 2026.

The district’s current outstanding long-term debt is more than $274 million, including $185.5 million in principal and about $89 million in interest.

“Under the federal tax code, these bonds are eligible for tax-exempt refunding within 90 days of the call date,” District 308 chief financial officer and chief school business official Raphael Obafemi said.

The current bonds have an interest rate of 5%, while the estimated all-in cost of the new bonds is 4.1%. At the Aug. 11 Oswego School Board meeting, board members voted unanimously to refinance the bonds.

“The rapid growth in our area during the early 2000s required us to build several schools quickly, resulting in a significant accumulation of debt,” Board President Dominick Cirone said. “We’re now reaching a point where those costs are beginning to ease and opportunities like this allow us to restructure and save on behalf of our community.”

From 2000 to 2009, Kendall County was the fastest-growing county in the United States.

Refinancing the bonds could yield an estimated present value savings of $4.5 million and an estimated total savings over the llfe of the bonds of $5.6 million, Obafemi said.

“The savings from the refinancing goes back to taxpayers,” he said.

District 308 is the seventh largest school district in the state and serves all of Oswego and portions of Aurora, Joliet, Montgomery, Plainfield and Yorkville.