Does Fort Worth ISD refund debt to take advantage of lower interest rates?

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Yes, just as many homeowners take advantage of lower interest rates, Fort Worth ISD refinances or “refunds” bonds from higher to lower interest rates to save money. When bonds are sold, generally there is a time period where the bonds cannot be refinanced (refunded) to guarantee the bond purchaser a set amount of interest income.  However, after a certain period, bonds can become “callable” at which time a school district can refund the bonds to save money (depending on interest rates at the proposed time the bonds become callable). 

Refunding bonds is a matter of taking advantage of lower interest rate levels and is not related to this TRE.  Bond payments are fixed and known from the time a bond is sold until it is paid off unless it is refunded.  The fact that interest rates are known and bond repayment schedules are fixed is part of the reason Fort Worth ISD can achieve millions in savings when calling bonds.  Over the years, the District has saved millions of dollars in interest payments by refunding bonds at lower interest rates to save money.