San Jose, CA – The Oak Grove School District (Oak Grove) successfully refinanced some general obligation bonds to take advantage of historically low interest rates, bringing tax relief to local taxpayers. The bond refinancing generates total savings of over $2.5 million and will benefit the community in the form of reduced interest costs over time.
In addition, Oak Grove successfully sold $25 million in Measure S voter approved bonds to fund school facilities modernization projects to better serve students by improving learning environments and acquiring technology to facilitate distance learning.
The District availed itself of the historic low interest rate environment and issued new bonds at an interest rate of 2.3% to refinance previously issued bonds, which carried an interest rate of over 5.0%. The District’s action to refinance and issue new bonds was unanimously approved by the Board of Trustees in May 2020. Board President John Mackey said, “The Board’s action reflects our continued commitment to looking out for our taxpayer’s interests and improving the quality of education in Oak Grove. We are pleased that this action will benefit our community and our students.”
Oak Grove’s bonds were well received by investors, and the demand for bonds exceeded the amount available for sale. This strong demand was driven primarily by the District’s high-quality credit rating of “Aa3” (Moody’s), and the District’s robust local economy. In addition, the desirability for U.S. securities during times of global uncertainty further increased demand and enabled the District to lock in interest rates that are near historic lows.
“The Board of Trustees and staff greatly value the strong support we receive from our community, and we are very pleased to complete these transactions to improve our schools and save our local taxpayers over $2.5 million by refinancing,” said José Manzo, the District’s Superintendent.
About the Oak Grove School District: Oak Grove School District serves approximately 10,000 students and provides TK-8 grade education at 14 elementary schools and 3 intermediate schools. Students come from families that speak nearly 60 different languages representing the great diversity of the region. Oak Grove is located in the southeastern corner of San Jose, California bounded by Capitol Expressway to the north, Canoas Creek to the west, Bernal Road to the south and the foothills to the east.