As we noted last month, the Penn Hills School District was placed into financial watch status under Act 141. One of the reasons cited was an outstanding debt to expenditure ratio of 189%. Part of the action directed toward that condition, rightly or wrongly, was the decision this week to restructure its debt by refinancing.
Based on a presentation to the District on “General Obligation Debt Restructuring/Partial Funding PSERS Payment” there are currently seven outstanding bond issues dating back as early as 2009. The current aggregate net debt service schedule stretches to 2043 and totals $239.8 million. The restructuring, based on the article and the presentation, appears targeted at the Series 2014 which was utilized for building construction. Currently the repayment schedule would be concluded in 2023 with annual payments of $3.5 million and a final payment of $423k.
The restructuring leaves one payment of $3.5 million under the series of 2014, and then adds a restricted series of 2017 A and B for restructuring and pension liability. The end result in 2043 would be $268 million versus the $239 million currently.
