Lone Star College announced that it is saving taxpayers $81.35 million through early payoff and re-funding of previously-issued construction bonds.
LSC issued bonds in 2008 and 2009 for the construction of facilities built to accommodate the large student enrollment growth. Earlier this month, these bonds were refinanced at a better interest rate, saving $31.7 million over the life of the bonds.
In addition, bonds issued in 2007 and 2012 were also refinanced and yielded $14.8 million in anticipated bottom-line savings over the life of these bonds.
Finally, LSC paid off a number of bond issues early which results in an additional $34.85 million savings for LSC taxpayers.
“Lone Star College will continue to aggressively manage outstanding bond debt with the goal of saving as much as possible for the benefit of LSC taxpayers,” said Dr. Stephen C. Head, LSC chancellor.
“We pledged to expediently manage these resources in a number of ways, including delaying or eliminating any construction projects we deem unnecessary, paying off bond debt early when possible, and refinancing outstanding bonds to help save in interest payments,” said Head. “We’ve done all of the above and are excited to announce this anticipated savings of $81.35 million.”
LSC taxpayers voted to approve the issuance of construction bonds in 2008 to expand facilities for the burgeoning student population at LSC. And in 2014, voters overwhelmingly approved $485 million in construction bonds, which included construction of additional space at all six Lone Star Colleges along with renovations of current facilities.
LSC will continue to monitor market conditions to delay construction on any facilities not needed and to refinance bond debt when it will save money for LSC taxpayers.
Below is more detail concerning the recent money-saving activity:
- LSC refinanced $142 million in bonds previously issued in 2008 and 2009 at 5 % average rate with 2.84 % rate. Projected savings: $31.7 million.
- LSC refinanced $56.1 million in bond debt ($43.4 million in Revenue Financing System Bonds issued in 2007 and 2012 at 5.47 % average rate and $12.7 million in Maintenance Tax Notes issued in 2009 at 4.85 % average rate.) Replaced with debt yielding 2.77% on the Revenue Bonds and 1.52% on the MTNs. Projected savings: $14.8 million.
- LSC used $30.4 million in unspent bond proceeds and $2.5 million in I & S fund balance to pay-off early $29.1 million. Projected savings: $34.85 million.
- Total projected savings: $81.35 million.
Known for its leadership, innovation and steadfast commitment to student success, Lone Star College provides high-quality academic transfer and workforce education / career training programs to more than 83,000 credit students each semester, and a total enrollment of 95,000 students. LSC is training tomorrow’s workforce today and redefining the community college experience to promote student success and economic prosperity. Stephen C. Head, Ph.D., is the chancellor of LSC, the largest institution of higher education in the Houston area, which consists of six colleges, eight centers, two university centers, Lone Star Corporate College and LSC-Online. To learn more visit LoneStar.edu.