Delano Joint Union High School District
Strategic Refunding Generates Debt Service Savings and Strengthens Long-Term Financial Flexibility
Background
Delano Joint Union High School District (the District), located in Kern and Tulare Counties, California, serves approximately 3,940 students across multiple high school campuses and alternative education programs. The District encompasses the City of Delano and surrounding communities and maintains a diverse tax base supported by agricultural, industrial, and residential property.
In recent years, the District has experienced steady growth in its tax base, strengthening its overall credit profile and creating an opportunity to refinance outstanding obligations under more favorable market conditions. As part of its ongoing debt management strategy, the District evaluated opportunities to reduce borrowing costs and improve overall debt service efficiency.
On March 3, 2026, Baird’s California K-12 Public Finance group served as sole managing underwriter for the District’s $16,580,000 refunding bonds. The bonds carried an underlying rating of A+ from S&P and were enhanced to AA through municipal bond insurance.
Opportunity
The District entered the market to refinance existing general obligation bonds, including portions of its 2010 Series B and 2014 refunding bonds. The financing was designed to generate debt service savings while streamlining the District’s overall debt profile, maintaining stable tax rates for constituents, and preserving financial flexibility for future capital needs.
The transaction was structured as a current refunding with no optional redemption prior to maturity, providing certainty of cash flows and a straightforward repayment structure.
Solution & Implementation
The $16,580,000 General Obligation Refunding Bonds were structured with a serial maturity schedule running from 2026 through 2035. The financing was designed to produce a level debt service profile aligned with the District’s tax base and long-term financial plan.
Investor demand was strongest in the front end of the curve, allowing the District to lower borrowing costs during pricing. Despite market conditions weakening over the course of the day, Baird successfully navigated changing dynamics and finalized pricing with a fully placed transaction. The District received 33 separate orders totaling $23.3 million. It’s worth noting that this transaction was priced just when the war in Iran broke out and interest rates rose significantly over several weeks. The timing was critical to locking in strong savings and lower interest rates for the District.
Results & Impact
The successful timing and execution of the refunding enabled the District to achieve over $2.5 million total gross savings and generate over $2 million in net present value savings and 10.91%, net of all financing costs.
The transaction reflects the District’s proactive approach to financial management and commitment to maximizing taxpayer value. Strong investor demand for high-quality California school district credits contributed to a successful outcome and reinforced market confidence in the District’s credit moving forward.