H-W receives highest Moody’s rating

The Hewlett-Woodmere School District has been awarded the “highest quality” rating of Aa1 from the credit rating agency Moody’s Corporation, which will result in lower borrowing costs for the district and the ability to refinance bonds at lower interest rates.

Last September, the Hewlett-Woodmere Board of Education voted unanimously to allow the administration to explore the refinancing of bonds first issued in 2002, for $23.14 million, which now have a principal balance of just under $14 million, according to Dr. Peter Weber, assistant superintendent of business. The bonds funded an expansion and renovation of Hewlett High School in which a new wing was added and extensive improvements were made throughout the building.

Weber said that the district wanted to wait to proceed with the refinancing of the bonds, until the “most favorable economic time,” which is in the spring.

He explained that Aa1 is the highest rating any municipality can receive. “It is particularly important because investors look at this rating,” Weber said. “It puts us in a much stronger position for any borrowing we need to do, and it also supports the district’s long-term decision to have a consistent budgeting practice and long-range planning. I’m very optimistic about our prospects as we move forward.”

Moody’s completed its review after the district consulted with the New York Municipal Advisors Corporation and its bond counsel, Hawkins, Delafield and Wood, and finished the required paperwork. Moody’s ratings provide investors with a simple system to gauge the creditworthiness of a company or a municipal entity.

School board President Stephanie Gould said that a responsible board must always look to the future. “When we issued the bonds in 2002, we had the foresight to make them callable so that we could refinance in a favorable market,” Gould said. “School districts have an obligation to save money wherever possible. Fortunately, we have the financial expertise in place to go the extra mile.”

A callable bond allows the issuer to retain the right to redeem the bond before it matures.

“The Moody’s upgrade recognizes the district’s commitment to systematic and consistent long-range planning,” said Superintendent Dr. Joyce Bisso. “This approach is reflective of our planning across a broad range of district operations.”

Stephen Witt, the board’s vice president, chairman of the district’s Audit Committee and a retired bank executive, echoed Bisso’s comments. “The Moody’s rating comes as a result of their review of the district’s financial strength over time and is a reflection of our financial stability,” Witt said. “I am confident that this rating will translate into significant savings in the future.”

Weber said that with the new Moody’s rating, the district could prepare an official statement to be sent to underwriters, who could market new bonds to gain even more taxpayer

savings through lower interest rates.

“When we issued the bonds in 2002, there was a provision that said on June 30, 2011, the bonds could be called and bond holders would receive their principal investment back,” Weber said. “With rates on these bonds approaching five percent, the opportunity for financing may save district residents a substantial sum over the next decade.”