Another reason for this situation is that investors differ as to their end requirements. To an investor looking for no current income a single principal maturity in the future fits perfectly. Because of these differences school districts through their financial team can market the securities to the absolute best buyers thereby receiving the most proceeds for their projects. The decreased yield, which translates into a higher price for the security will provide more proceeds to schools and further help the capital funding requirements. This enhancement is a major change for school districts.
New construction is a very important piece for growing school districts.
With many school districts building at least one school per year and sometimes even more, including new construction as an authorized use is paramount. The bonds will benefit in the market because of the increased presence. As the securities become more prevalent in the market place the liquidity problems will decrease and a secondary market will appear. By eliminating the private contribution component the small suburban and rural school districts can participate. Sometimes it is difficult to get businesses to look to these smaller districts when a larger district is located in the same geographic area.