In 2011, the Poway Unified School District which serves the city of Poway, California, and part of San Diego, borrowed $105 million on a 40-year capital appreciation bond
. (31) They will make some interest payments starting around the year 2031, but otherwise no payments are due until maturity, in 2051.
Dale filed a bill this week aimed at restricting how school districts can issue capital appreciation bonds
. But school officials at some of the state's fastest-growing districts, like Leander, in Dale's district, have countered that the state limits on borrowing have made those bonds their best option for raising the money necessary to stem overcrowding.
An unusual situation can arise in the case of deep discount debt (capital appreciation bonds
, zero-coupon bonds).
Amortization is below average partly due to the county's POB capital appreciation bonds
--$27.5 million first tier 2013B (capital appreciation bonds
--$58.6 million capital appreciation bonds
, series 1999E.
Amortization of direct debt is below average, partly due to the use of capital appreciation bonds
in several prior issuances.
Amortization is rapid, despite modest use of capital appreciation bonds
. The city maintains a public debt amortization fund ($61.9 million in 2014) which is governed by state statute and the city commission.