The Wright City R-II Board of Education approved a resolution to issue $11 million in bond funds, as a part of Prop G, which was passed by voters on April 8.
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The Wright City R-II Board of Education approved a resolution to issue $11 million in bond funds, as a part of Prop G, which was passed by voters on April 8.
The board approved the measure 6-0. Heidi Box Halleman was absent.
Prop G is a bond measure that will allow the school to build a performance gym at the new high school that opened up in January.
With the resolution in place, the district’s bond underwriter, Piper Sandler and Co., has been authorized to price the bonds within specific financial parameters when market conditions are favorable.
Brent Blevins, managing director at Piper and Sandler, addressed the board on April 15 and explained that the current municipal bond market is facing significant volatility, in part due to the impact of tariffs. This instability has resulted in very few bond pricings taking place across the country.
The resolution will allow Piper Sandler to secure the most proceeds at the lowest possible interest rates when the market is conducive. This also allows the company to move quickly when conditions are favorable.
Once pricing is complete, Austin Jones, R-II board president and Dave Mikus, the board secretary, will sign off to complete final pricing.
While the board has granted approval, Piper and Sandler will have the ability to price the bonds at the earliest of May 8. This is due to the requirement that the Missouri State Auditor must first certify the election results 30 days after an election.
In addition, the district will need time to obtain its bond underlying ratings, which play a crucial role in determining the interest rates the district will pay. They have previously received a AA- rating.
Blevins said the district is currently looking at a 4.72 interest rate if they were to sell today.
Blevins expressed confidence in the R-II’s financial standing, telling board members that he does not expect rates to go higher than 6%.
“You’re a highly rated school district. You’re going to get good yields based upon the market,” Blevins said.
The parameters were set higher than what Piper Sandler expects to price the bonds. This is due to market conditions and is seen as a “security blanket.”
With rates moving, the district still can get the $11 million in parts. Blevins did tell the board there is no concern about receiving the money because they have market risk built in.
Within the parameters, Piper Sandler, can price bonds based on six conditions. One condition says the interest rates cannot exceed 6%, while another says the bond's maturity, also known as the payment schedule, must last at least 10 years and not exceed 19.
In cohesion with that condition, the maturity of the bonds cannot be any later than March 1, 2040. In addition, the underwriting discount cannot exceed $7.50 per $1,000.
Lastly, the bonds can be subject to redemption if the district chooses to do so at its stated maturity no later than March 1, 2035, with a redemption price that cannot exceed 100%.
A time frame for the gym’s construction has not been finalized.
