The Cape Girardeau School District continued its inquiry into the possibility of refinancing the $18 million bond series passed in 2000 during the board of education meeting Tuesday night.

Greg Bricker, vice president of George K. Baum and Company in Kansas City, Mo., told board members that refinancing would not be advisable at this time.

Through a process known as advanced refunding, the district has the option of selling those bonds and placing the money in an escrow account to earn interest that could be used to pay off the bonds when they become payable in 2010.

The bonds are actually due in 2020, but through optional redemption, the district has the option of paying them off 10 years sooner to avoid 10-years worth of interest rate charges.

Bricker said the idea behind advanced refunding is to sell bonds when interests rates are at their lowest.

In this situation, the school district is a borrower, so low interest rates are ideal, Bricker said. But the district is also an investor in this transaction, so higher interest rates are beneficial as well.

The interest rates in the current market would create a negative arbitrage between those interest rates, so the district would actually be losing money.

"You don't want to refinance right now. In my mind, there's no reason to do a refund if there's no economic value, and right now there's not," Bricker said.

The school board has been considering the possibility of refinancing the bonds since July as a means of generating additional funding.

"It's something we continue to consider at as we look at the long-term needs of the district," said district superintendent Mark Bowles.