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Los Alamos Public Schools put a $3 million bond issue out to bid and has accepted the lowest bid, which was placed by Los Alamos National Bank (LANB). This bond is the residual amount from a $7 million general obligation school building bond election held Sept. 19, 2006.
LANB Cashier Anne Kain discussed the bond and why the bank submitted the favorable bid during a Nov. 20 school board meeting.
“We have strong values that emphasize supporting and investing in our community and this is one way we can show our support,” Kain said. “It allows the schools to get a better rate and is a good investment for the bank.”
LANB purchased the entire issue through local broker Kious and Company, Inc, which specializes in New Mexico municipal bond issues. Kious and Company has provided bond underwriting for more than 80 New Mexico school districts.
LANB’s bid provided the lowest cost to the schools, beating out Morgan Keegan, Stifel, Nicolaus & Co. Inc., and The Baker Group. The bank bid a gross interest cost of $740,711. Morgan Keegan bid $759,049, Stifel, Nicolaus & Co. Inc., came in at $817,901 and The Baker Group trailed with $820,165.
“Investing in local bonds is good for the bank, the community and the futures of our kids,” said LANB President Steve Wells regarding the bond purchase.
LAPS Superintendent Mary McLeod expressed her appreciation to LANB for its continued support of the schools through the years.
“It’s so gratifying to us that the work we’re doing in the schools is supported by the community and especially by LANB,” McLeod said. “They’re always there to assist us with the work we are doing.”
The bond money will be used for erecting, remodeling, making additions to and furnishing school buildings. It also allows for purchasing or improving school grounds, software and hardware for student use in public schools and providing matching funds for capital outlay projects, funded pursuant to the Public School Capital Outlay Act, or any combination of these purposes.
LAPS maintains a Moody investment grade rating classified as an underlying Aa3 with Aa2 enhanced, which equates to high quality and differs from Aaa, the highest rating, only in the degree of protection provided to bondholders. The True Interest Cost on the winning bid is 3.5869 percent.
“When LANB bought the bonds, they competed nationally because they know we’re a good investment and they always try to invest their money back into the community,” School Board President Steve Girrens said. “They never hesitate to help out the schools because they understand the underpinning value of the schools to the community.”
Girrens mentioned that LANB is a major finance contributor to the district’s renewal bond campaign that’s currently underway.
“They are a staunch supporter of the bond renewal because they know how important the schools are to the community,” he said.
The bond’s debt service schedule is set to begin August 2009 and is payable semiannually each February and August to run through August 2020, however, the district has a strong history of paying off its debts sooner than scheduled.
LANB is one of the largest independent banks in New Mexico with assets of around $1.4 billion. Established in 1963 by a group of local investors, LANB continues to be locally owned and operated by Trinity Capital Corporation (TCC). TCC provides banking, trust and investment services and title company services to northern New Mexico and employs approximately 280 people in its offices in Los Alamos, White Rock and Santa Fe.