Since March 2026, Clear Creek ISD has seen interest rates climb by more than 100 basis points amid global uncertainty. Now the district is trying to prepare for the optimum time when it can refund its bonds at a lower interest rate.
The big picture
CCISD’s board of trustees voted unanimously at its Oct. 2 meeting to authorize the preparations for a potential bond-refunding transaction, which could save the district over $4.7 million in debt service payments.
The authorization sets a minimum savings threshold of 3%, which is about $4.5 million on $150 million in bonds, CCISD’s Financial Advisor Terrell Palmer said at the meeting. Palmer said his team hoped to achieve closer to 5%, or about $7.5 million.
Why it matters
Palmer said prior to the Tax Cuts and Jobs Act being signed into law in 2017, it was possible to refinance bonds well in advance of the call date of the bonds. However, the act shrank the tax-exempt bond refinancing window to 90 days before the bond’s call date—the date when issuers can buy back a bond before its maturity, Palmer said.
The bonds the district is considering refinancing now have a call date in February, Palmer said.
According to district staff
Palmer said the war with Iran was a contributing factor to rising interest rates, which are up 1%.
“We think once those events in the Middle East clear up, oil prices will go down, inflation fears will dissipate and interest rates will come back down,” Palmer said.
Palmer recommended the district approve the agenda item in order to prepare for the potential refunding early, allowing the district to act quickly should more favorable market conditions arise.
“Once it clears up there is going to be a lot of pent-up demand for the issuance of bonds,” Palmer said. “A lot of people are waiting on the sidelines to see if interest rates come back down.”
Another point of view
Trustee member Arturo Sanchez said he considered preparing for the refunding was an act of good faith, which would afford the district flexibility to choose the optimum time to refund its bonds.
“I also hope that more people share your optimism about how things will settle and how quickly they’ll settle as I do agree with you,” Sanchez said. “It’s inserted a lot of uncertainty in lots of markets … about what the future looks like.”
