Glacier Bank snaps up $9 million in Bigfork bonds
Christmas is coming a little late to Bigfork schools, but by Dec. 29 there will be a nice little stocking stuffer in the school district’s bank account.
Just over $9 million, to be exact.
After Bigfork school district voters overwhelmingly approved a $14 million bond sale in November, Glacier Bank purchased $9 million in bonds and the sale will close Dec. 29.
The sale of bonds raises money for the district to make renovations and upgrades to Bigfork High School. The bonds are loans that are repaid by taxpayers. Glacier Bank negotiated the purchase of the bonds with the Bigfork school board, and the bank stands to make about three percent on the bonds, Glacier Bank president Bob Nystuen said.
Glacier Bank will retain the bonds in its asset portfolio. “We consider it akin to a loan that we are making to the school district, to fund the district,” Nystuen said.
Glacier Bank has purchased general obligation bonds before, but Nystuen said they were particularly interested in participating in the Bigfork bond sale.
“It’s a very good purchase,” Nystuen said. “We like the size of this, and it’s a transaction that we are comfortable with. This is a great source of predictable income for us, because we know the repayment source. Bigfork is a known, well-established school district.”
General obligation bonds, such as the one in Bigfork, are sold on the open fiancial market and are repaid with taxpayer money. Revenue bonds, on the other hand, are repaid with fees by users, such as parking fees for a parking structure.
Glacier Bank also has recently helped Bigfork School District refinance $3.5 million in general-obligation bonds in the Bigfork elementary district. With interest rates low, this helped the district taxpayers save thousands of dollars.
The rate of return on this month’s $9 million Glacier Bank bond purchase is to be determined at a rate comparable to A-plus rated security, which is just below three percent.
Nystuen said Glacier Bank is pursuing more municipal bond financing. Rather than the bonds being sold to an out of state financial institution, the purchase of Bigfork bonds by a Glacier Bank helps keep money in the local economy. “This is a business opportunity that we are able to help the school district,” Nystuen said. “We’re just so delighted this is a win-win. I have to believe the students, faculty and administration are going to enjoy that new school.”
Bond counsel Dorsey and Whitney in Missoula received $16,500 on the sale, and D.A. Davidson, the placement agent, received $45,375, according to Lacey Porrovecchio, business manager for the Bigfork school district.
The remaining, second series of the Bigfork bonds will be sold in 2016.
This was the first bond sale that Porrovechio has participated in. “I’ve learned a lot this last year,” she said. Now that there will be money in the Bigfork school district bank account to pursue the high school renovation project, architects and surveyors are getting busy. Construction will begin in the spring. “Everybody’s really excited,” Porrovecchio said.