Distrito Escolar del - Osceola County School District

11. DEFEASED DEBT
The Florida Department of Education issued Capital Outlay Refunding Bonds, Series 2010A, dated October
14, 2010, with an average interest rate of 4.82 percent, to refund callable portions of the District’s State
School Bonds, Series 2001A and Series 2002A. The Refunding Bonds are being issued to refund the
$835,000 principal amount of the District’s State School Bonds, Series 2001A, that mature on or after
January 1, 2012 and to refund the $540,000 principal amount of the District’s State School Bonds, Series
2002A, that mature on or after January 1, 2013.
The District’s pro rata share of net proceeds totaling $1,394,610 (after deduction of $11,496 by the Florida
Department of Education for the District’s pro rata share of underwriting fees, insurance, and other issuance
costs) were placed in an irrevocable trust to provide for future debt service payments. Of this amount,
$833,535 related to the Series 2001A bonds and $561,075 related to the Series 2002A bonds. As a result,
$835,000 of the State School Bonds, Series 2001A and $540,000 of the State School Bonds, Series 2001A are
considered to be in-substance defeased and the liability for these bonds has been removed from the
government-wide financial statements.
The Series 2010A bonds were issued to reduce the total debt service payments from the 2001A bonds over
the next 10 years by approximately $234,626 and to obtain an economic gain (difference between the present
value of the debt service payments on the old and new debt) of $221,141.
The Series 2010A bonds were issued to reduce the total debt service payments from the 2002A bonds over
the next 11 years by approximately $45,911 and to obtain an economic gain (difference between the present
value of the debt service payments on the old and new debt) of $66,276.
The Florida Department of Education issued Capital Outlay Refunding Bonds, Series 2011A, dated January
5, 2012, with an average interest rate of 4.55 percent, to refund callable portions of the District’s State
School Bonds, Series 2003A. The Refunding Bonds are being issued to refund the $1,305,000 principal
amount of the District’s State School Bonds, Series 2003A, that mature on or after January 1, 2013.
The District’s pro rata share of net proceeds totaling $1,305,199 (after deduction of $3,373 by the Florida
Department of Education for the District’s pro rata share of underwriting fees, insurance, and other issuance
costs) were placed in an irrevocable trust to provide for future debt service payments.
The escrow payment of $1,305,199 related to the Series 2003A bonds which was invested in the state
treasury and not considered essentially risk-free. Therefore, the refunding of the callable portion of the
Series 2003A bond issue is not considered an in-substance defeasance. The total outstanding amount of the
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