DOWAGIAC — The Southwestern Michigan College Board of Trustees announced that last week it refinanced the debt on one of the college’s residence halls, saving taxpayers a total of $1,441,701 over the next 21 years.

In preparing for the refinancing bond sale, the college worked with its municipal advisor, Bendzinski & Co., requested that S&P Global Ratings, a business unit of Standard and Poor’s Financial Services LLC evaluate its credit quality.

Another rating agency, Moody’s, had recently reaffirmed its negative outlook for the higher education sector as a whole for the second straight year, representatives of the college said. S&P assigned SMC an outstanding rating of “AA” and stable and said the college’s adequate income indicators and strong market value per share; strong general fund performance while maintaining very strong reserves; and moderate overall debt burden was its rationale for rating the college at this level.

Dr. David Mathews outlined the savings in his president’s report at the Aug. 19 Board of Trustees meeting.

“Our financial model all along was that we’d be able to build the residence halls, pay the debt service from money that comes in, pay operating expenses and build a reserve fund,” Mathews said. “Not only has housing been self-sustaining, but it has also produced additional revenue that has allowed us to do other campus improvements. We are always looking for ways to save money. Interest rates have gone down substantially since we initially bonded for our second residence hall. Last week’s bond sale came out even better than we hoped. It’s hard to believe we’re 10 years into the student housing business. The savings will continue to allow us to replace furniture, make repairs and paint on a regular schedule, and build up a long-range replacement fund.”

Chairman Thomas Jerdon also recognized Vice President and Chief Business Officer Susan Coulston and her department.

“Susan is always on top of windows of opportunity in the bond market when we need to strike,” Jerdon said.

SMC’s financing was conducted by the Michigan investment banking office of the brokerage firm, Stifel, the financial advising firm Bendzinski & Co. and the law firm serving as bond counsel, Thrun Law Firm, P.C. The college’s 2019 refunding bonds were sold at a true interest rate of 2.56 percent with a final maturity of 2040.

“Southwestern Michigan College’s bonds were sold at an opportune time in the bond market,” said Brodie Killian, the managing director with Stifel. “The college was able to enter the bond market after a recent decline in interest rates. The financing met the goals of the college and resulted in a cost of borrowing that was considerably lower than originally anticipated.”