BOARD OF EDUCATION REFINANCES APRIL BONDS

A decision Thursday by the Cape Girardeau Board of Education to refinance general obligation bonds will net the district about $300,000 in long-term savings.

"It's like refinancing a house mortgage," said Tim Guiling, associate vice president for A.G. Edwards & Sons Inc., after the noon meeting. "There will be an overall savings of around 3.8 percent."

A $14 million bond issue was approved last April by voters to finance upgrading, construction and expansion of district facilities. The callable, tax-exempt bonds were sold later that month at a 5.65 percent interest rate, he said.

After a slight increase in interest rates during June and July, the rates began dropping and are continuing to drop, he said.

Board members authorized underwriters A.G. Edwards and bond counsel Gilmore and Bell to pursue interest rates of about 4.8 percent, thereby providing the district with an opportunity to resell some of the bonds and save money during the life of the bonds, said Guiling.

The savings will not be tangible in the usual sense, he said. Any savings will have to go back into the debt service fund, where it will reduce interest payments.

"Like refinancing mortgages, you'll see a drop in your payments, but you don't actually get to pocket the money," he said.