Ypsilanti Community Schools completes $18.7M bond sale

Posted on Wed, Aug 14, 2013 : 4:54 p.m.

Ypsilanti Community Schools completes $18.7M bond sale

By Amy Biolchini

Ypsilanti Community Schools sold $18.7 million in debt Wednesday — the largest deal in Michigan since Detroit filed for bankruptcy, the Wall Street Journal reported.

The 10-year bond, sold by the Michigan Finance Authority for YCS, has a yield of 4.29 percent, according to the report. That's a 0.75 percentage point more than a similarly rated bond.

Read the full report by the Wall Street Journal

Detroit's bankruptcy filings have caused at least three municipalities in Michigan to halt their bond sales because of the concern that it will now be more expensive for municipalities to borrow money.

Ypsilanti Community Schools is the newly consolidated school district that absorbed $18.8 million in debt from the former Willow Run Community Schools and Ypsilanti Public Schools.

The Board of Education for the new district authorized officials July 25 to refinance the district's debt through a bond issue through the Municipal Finance Authority that would be paid back over 13 years. Officials were expecting an interest rate of 3 to 6 percent.

YCS declined to release a statement to AnnArbor.com pending the official announcement of the bond sale from the Michigan Department of Treasury. That official announcement has yet to be released.

Amy Biolchini covers Washtenaw County, health and environmental issues for AnnArbor.com. Reach her at (734) 623-2552, amybiolchini@annarbor.com or on Twitter.

Comments

Amy Biolchini

Thu, Aug 15, 2013 : 3:29 p.m.

Terry A. Stanton, director of communications for the Michigan Department of Treasury, issued the following statement on the bond sale late Wednesday: "We are very pleased with the results of today's sale. Overall, the transaction was completed at the anticipated pricing levels. The transaction is an important step forward to ensure the long-term financial stability for Ypsilanti Community Schools."

Ren Farley

Thu, Aug 15, 2013 : 12:57 p.m.

Is it correct to infer that had not Kevyn Orr requested protection for Detroit from the federal bankruptcy court, the Ypsilanti Community schools would have sold the bonds for a 3.54% rate? Is the extra 0.75% a result of the financial difficulties of Detroit and the way those problems have been dealt with by the state?

Angry Moderate

Thu, Aug 15, 2013 : 1:08 p.m.

I think it's safer to infer that investors aren't dumb, and know that Ypsi and its schools are mismanaged.