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Philly schools' bond deal to yield $140 million in savings

The Philadelphia School District's improved credit outlook is already paying dividends. As part of a $1.4 billion bond deal Wednesday, the district refinanced $1.15 billion of existing bonds at lower rates to save the district $140 million over the next 17 years.

The Philadelphia School District's improved credit outlook is already paying dividends.

As part of a $1.4 billion bond deal Wednesday, the district refinanced $1.15 billion of existing bonds at lower rates to save the district $140 million over the next 17 years.

"These are all dollars we'll be able to spend on the schools instead of on debt service," Uri Monson, the district's chief financial officer, told the School Reform Commission on Thursday morning.

The commission members voted to approve the deal at a special meeting.

Monson said that the savings would be spread out over the term and would average between $3 million and $4 million per year.

Commission member Bill Green praised the results of the bond sale, describing it as "$3 million to $4 million in found money a year."

The deal also included the sale of bonds that generated $250 million for the district's capital improvement plan.

In recognition of the district's improved finances, the bond rating agencies Moody's Investor Services and Fitch Ratings Inc. boosted the district's credit outlook for the first time since 2010 earlier this month. Both changed their view of the district's finances from "negative" to "stable."

Monson said the more favorable ratings helped the district obtain a total interest of 3.9 percent on the bonds "which, for our rating, is actually a good result."

The district had planned to issue the bonds last year but could not because of the impasse over the state budget, he said.

martha.woodall@phillynews.com 215-854-2789 @marwooda