Cabrillo Refinancing Saves for Local Taxpayers

The Cabrillo Community College District announced that it has refinanced a portion of Cabrillo’s Election of 2004 General Obligation Bonds and 2012 General Obligation Refunding Bonds, resulting in $29,542,000 in interest rate savings to local taxpayers.

Under the leadership of its Governing Board, Cabrillo Administration took the initiative to capture historically low interest rates to refinance the remaining portions of 2004 General Obligation Bonds, Series B and 2012 General Obligation Refunding Bonds. Cabrillo was able to reduce the interest rates on the prior bonds from an average of 4.84% to 2.53%, reducing the community’s tax bill by an unprecedented total of $29.5 million over the life of the bond refinancing.

“We are tremendously pleased that the taxpayers of the region will benefit from lower tax payments over the life of these bonds,” said Board of Trustees President Christina Cuevas. “We worked closely with a financial advising team to take advantage of historically low interest rates, and it clearly paid off.”

Cabrillo College President and Superintendent Matt Wetstein said the refinanced bond sale is a good indicator that the Cabrillo Community College District has strong fiscal management practices and that the College is looking out for the interests of local homeowners.

“We wanted to make sure that we are good stewards of taxpayer dollars and try to save folks money over the long haul. It’s important to stay on top of interest rate trends, and in this case, our ability to refinance was a real big win for our community.”

Cabrillo’s ability to obtain such low interest rates and achieve these high savings levels was boosted by its credit ratings of “Aa2” assigned by Moody’s Investors Service and “AA” from Standard and Poor’s, which reflect the District’s 1) large property tax base, 2) stable finances and strong reserves, and 3) good financial management policies.

The District had $59.1 million in Bonds to sell and received $74.6 million in orders from a diverse investor base which included bond funds, banks, separately managed accounts, insurance companies, and governmental agencies (including participation from Santa Cruz County).

While Cabrillo will not directly receive any portion of the savings, the Governing Board and Administration pursued this opportunity strictly on behalf of local taxpayers as part of their continued support for the education of its students and community.

This was the second time in recent history that Cabrillo College has delivered savings to its community. In May 2012, Cabrillo completed a similar bond refinancing and saved local taxpayers a total of $4.8 million.

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For more info: www.cabrillo.edu