School borrowing affected by credit crunch

By Meranda Watling, Journal & Courier

mwatling@journalandcourier.com

When Tippecanoe School Corp. borrowed $9.5 million in tax anticipation warrants in January, eight banks bid to lend to the district, which settled on a 2.75 percent interest rate.

But when the district sought to sell $4.5 million more in tax anticipation warrants this month, only two banks expressed interest. And the lowest interest rate was 4.1 percent, according to TSC Chief Financial Officer Kim Fox.

"We are seeing an impact of what's happening in the financial markets," Fox said. "We sent it out to the same folks we always do. I was shocked, to tell you the truth, that we did not receive more bids."