As part of its ongoing commitment to fiscal accountability, the Sioux Falls School District recently used a debt-management strategy known as bond tendering. Through this process, the District offered to purchase $48.6 million in outstanding bonds from investors before the bonds reached maturity.
The debt was then refinanced by issuing $39.7 million in new bonds at more favorable terms. After accounting for transaction costs and other financial factors, the strategy is expected to save the District approximately $2.3 Million through FY2040. The outcome frees up money for investors and reduces the overall debt amount for the district, proving to be a win-win for all parties.
This long-term savings is an example of the District's ongoing commitment to fiscal accountability.
What is bond tendering?
Investors agree to sell back older, lower-interest bonds for less than face value so they can lend that money to others at higher rates.
SFSD replaces the larger amount of old debt with a smaller amount.