CAPE SCHOOL BONDS SOLD; CONSTRUCTION FUND TO BE SET UP

~Correction: Editor's note: This story, which appeared Tuesday on Page 1, is being republished because a portion of it was inadvertently omitted.

Consummating the wishes of an overwhelming number of voters, the Cape Girardeau Board of Education Tuesday approved a contract with A.G. Edwards and Sons Inc. for the sale of nearly $14 million in bonds for school improvements.

Proceeds from the sale will go toward a new elementary building, additions to Jefferson Elementary School, renovations to existing school buildings, and construction of a vocational-technical school.

Timothy L. Guiling, associate vice president of investment banking for the St. Louis office of A.G. Edwards, announced to the board at a special meeting that all of the bonds sold in one day.

"Although there was a week of presale negotiations for the bonds, the total amount of $13,999,195.25 was sold by 1 p.m. on Monday," he said.

Guiling said $2.5 million in bonds were sold to local investors and over $6 million were sold to State Farm Insurance Corp. The rest were sold to individual investors, he said.

"A.G. Edwards took into consideration the fact that market rates will continue to rise," he said. "But we felt there is a stable market at this time, with no large jumps up or down."

Guiling told the board the rating of the bonds with the state's backing was AA. He said the school district could have had an A-plus rating without state backing, he explained.

"That is an extremely high rating for a school system," he said.

Guiling said the arbitrage yield for the bonds is 5.56 percent.

Money from the sale will be placed into a construction fund for the school system on April 30. Guiling told board members the issuance costs of the bonds will be reimbursed by the state.