AAA Rating Helps Reading Lock in Favorable Rate for $68.9M Bond
The Reading Select Board voted unanimously last Tuesday night to approve a general obligation bond issuance totaling $68,915,000, marking a major financial milestone for several high-profile town projects, including the new Killam Elementary School and the Reading Center for Active Living (ReCAL).
The bond sale, finalized on December 3, attracted strong interest thanks to Reading’s AAA bond rating, resulting in a highly favorable net interest rate of 3.317%. Treasurer Diane Morabito noted that the town also received a $6.99 million premium, which reduced the actual borrowing amount and will help offset issuance costs.
Where the Money Goes
- Killam School Project: $50 million (20-year term)
- ReCAL Project: $20 million (15-year term)
- Other Capital Projects: $4.84 million for Birch Meadow Phase 2, high school fieldhouse improvements, and pickleball courts.
The first principal payment of $1.82 million is scheduled for October 2026, with interest payments beginning in six months.
Impact on Taxpayers
The initial debt service payment of $5.19 million will translate to an estimated $590 annual increase for the average Reading homeowner (based on a $900,000 valuation):
- Killam School: $399
- ReCAL: $191
Officials emphasized that while the borrowing is significant, the town’s strong credit rating and structured borrowing approach helped secure competitive rates and minimize long-term costs. Extending the term beyond 20 years was considered but rejected due to the steep increase in interest—up to $61 million more over 25 years.
Next Steps
The funds will support construction timelines for both projects, with Killam expected to complete in 2027 and ReCAL in 2026. The Select Board also acknowledged that operational costs for these new facilities will require careful planning in future budgets.
