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Public School College Authority


March 1, 2012

February 29, 2012 -- The Alabama Public School and College Authority (PSCA) successfully completed the refinancing of $90.9 million of outstanding Capital Improvement Pool Bonds and the refinancing of $90.6 million of Economic Development and Training bonds issued, issued in 2002 and 2003.  Together, the two bond deals are expected to result in savings of over $26 million over the life of the bonds.

Due to a very favorable interest rate environment and solid credit ratings of AA+/AA/Aa1, the bonds sold on a competitive basis and well inside initial expectations with average true interest cost of 1.65% for the Capital Improvement Pool Bonds and 2.09% for the Economic Development and Training Bonds. Goldman Sachs and Bank of America Merrill Lynch were the winning bidders, respectively.

The Capital Improvement Pool Bonds were issued for the benefit of local school systems in 2002.  The refinancing will result in present value interest rate savings totaling $11.0 million, or approximately 12.1% of the outstanding balance of the bonds.  All of the savings will be passed along to the local school systems which participated in the 2002 issuance through lower annual debt service.

State School Superintendent, Dr. Tommy Bice, praised the sale, saying, “Today was a great day for Alabama’s public schools.  The refinancing of these bonds will provide additional relief to the Education Trust Fund and lower debt service for our local school systems.”

The Economic Development and Training Bonds were issued for the benefit of training of personnel for various economic development projects throughout the State.  The refinancing will result in present value interest rate savings totaling $14.3 million, or approximately 15.7% of the outstanding balance of the bonds.  All of the savings will be passed along to the Education Trust Fund through lower annual debt service.

State Finance Director, Marquita Davis, said, “Today’s sale results are unprecedented, with some of the lowest interest rates in the history of the State of Alabama, a testament to the financial strength and conservative balance sheet of our great State. During this difficult budget climate, we’re searching high and low for savings that will provide some relief to our school systems and the ETF.”




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