New Ken-Arnold refinances debt with new $20 million bond issue, expects to save $250k

The New Kensington-Arnold School Board has agreed to refinance four existing bond issues to save the district about $250,000.

The school district will issue up to $25 million in new bonds that will pay off the district’s four outstanding bond issues.

School board President Bob Pallone said the issues include one from 2012 for $16 million, one from 2013 for $7 million and two from 2014 for $1.88 million and $2.1 million.

“It’s probably going to be around $20 million,” said Joseph Muscatello, managing director of public finance for Boenning & Scattergood, the firm handling the issue.

Muscatello told the board last Thursday that he hopes to start selling the new issue by next Monday, April 8.

How much it yields in terms of savings to the district depends on the interest rate at that time and other school bond issues in the market.

“What this is going to depend on more so than their (district’s bond) rating is the supply of bonds in the market,” he said.

Although there will be a savings to the district, Pallone and Jeff McVay, the district’s director of administrative services, said it will have an impact on the 2020-21 budget, not the one being compiled for next school year.

“That money has to come back into the debt service,” Pallone said, “and when you do that, you are lowering the debt service. And, obviously, that affects the budget.”

McVay said about $168,000 of the savings will go into the debt service payment in May of next year.

He said the remaining amount, likely between $70,000 and $80,000, will be placed in the capital fund next year.