Explain the bond issue further. What are some of the details? Are there different ways to issue the bonds?
When bonds are issued, the purchaser can sometimes bid a premium (provide more funds) above the face amount of the bonds. This amount can be relatively small (less than 1% of the face amount) or it could be significant – even several million dollars. However, all of it (the face amount of the bonds as well as any premium) has to be paid back with interest – so a significant premium (in addition to the face amount of $43 million, in the case of District 203) would drive up the cost of the bond to taxpayers. The Board of Education is committed to collecting no more than $43 million in funds toward the project – as indicated by the “Estimated Tax Impact of $43 Million Bond Issue” chart in the Facilities Financing section of District 203 Plan for Upgrading School Facilities 2007-2012. “Zero coupon bonds” are bonds with no regular interest payment – all of the interest is paid when the bond comes due.
