Rapid response to the interest rate market by the Southwestern Michigan College administration and Board of Trustees will save district taxpayers some $2-million over the remaining life of the bond debt that helped major construction projects on the Dowagiac campus.
The college elected to refinance bonds sold more than 8 years ago to help construct their Keith H. McKenzie Residence Hall and to add the Student Activity Center to the Charles O. Zollar Building on campus.
SMC will save about $85,000 annually from refinancing $10.88-million of the $14.22 million bonds issued, lowering the average interest rate from 5.31-percent to 3.62-percent.
Brodie Killian is Senior Vice President of Raymond James and Associates — the school’s bond underwriter — and he says, “It’s a sizable reduction. We had some very good participation.” Wednesday morning he added, “Gross savings went up about $90,000 since this morning. It looks like our strategy to go out with wider yields turned out to be the right thing, because we got people to come in with anchor orders, then others joined in.” Killians says the percentage savings of refunding bonds is over 11.5-percent, “which is very good” against an industry execution standard of 3 to 5-percent.
Killian applauded SMC President Dr. David Mathews, Chief Business Officer Susan Coulston and Controller Michelle Kite who led the team in the refinancing plan. He told the board they should be proud of the administration for attaining Standard and Poor’s AA credit rating, calling it “testimony to SMC’s financial reputation and stability.”
