What is a bond and why would school districts want to issue a bond?

December 18, 2014 by Enzo Incandela, Associate | James M. Snyder, Partner
What is a bond and why would school districts want to issue a bond?

Bonds are a form of debt. In the public sector, “borrowers” or “issuers” of bonds are states, cities, villages, school districts and other local government entities that need money for a variety of reasons. Typically, a school district will want to issue a bond and pay principal and interest over time to spread out the burden of paying for new schools, improvements and other capital needs over the period of expected useful life of the financed assets, as opposed to increasing taxes or impacting its budget over a shorter term. Borrowing by a school district is highly restricted and must be done in accordance with Illinois law.


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