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Bond selling options weighed

November 16, 2010

Investment banker Vince Vialle, left, talks to Big Spring Independent School District trustees during a recent meeting. (File photo)

Big Spring Independent School District officials still have some construction bonds to sell. How they will sell the bonds has become a matter for discussion.

In September, BSISD trustees decided to hold off on selling almost $7 million of the $63 million in construction bonds authorized by voters. The unsold amount, which totaled $6.7 million, was held in abeyance to see if it could qualify under a special federal program which features extra-low interest rates.

The program, Qualified School Construction Bonds, would allow the district to pay back the bonds at interests near 0 percent, said Vince Vialle, an investment banker with the Lubbock firm of Specialized Public Financing, which has advised the district during the bond-selling process.

Despite the low rates, there are some strings attached to the federal program.

“Strictly from an interest rate standpoint, it would be advantageous to go with QSCB,” Vialle said. “However, we don't know if the district would qualify for QSCB until March, and there would be strings attached. For starters, the district would have to guarantee that construction … would comply with federal guidelines (meaning wages would have to fit under a certain schedule and certain construction materials would have to be purchased) and that could have a negative impact on the cost of the projects.”

Another option for the district has appeared, however. With interest rates near all-time low levels, Vialle said the district could simply sell the $6.7 million in bonds on the open market.

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