ADAMS TWP — The Mars School Board will pay $3.3 million to terminate its last large financial swaption.

The board voted Tuesday evening to end a 2006 swaption and issue a fixed-rate, 20-year bond for $12.8 million.

Scott Shearer of The PFM Group recommended the move because of current favorable market conditions. Bond counsel attorney Bob Ohmer said the deal would likely take place the second week of January.

Most of the $3.3 million fee to terminate the swaption will come from a district fund containing $2.4 million, Shearer said.

That money is from savings accrued through the proceeds of one of the district’s original swaptions that has gone untouched since 2002, Shearer said.

“This will have very little impact on our finances,” said board President Dayle Ferguson.

Shearer said the remaining amount of the fee to end the swap will be rolled into the new bond being financed.

“With the district’s cash and financing together, there will be no impact on the budget,” Shearer said of paying the fee.

He said the district has entered into several swaps, including three swaptions. The current termination and refinancing represents the last swaption.

Two base swaps from 2005 remain. One is a $12.8 million deal, and the other is for $7.4 million. These financial swaps are not the same as a swaption.

Shearer said the two base swaps generate about $6,000 in revenue per month for the district. There are no plans to end those.

“We are able to terminate them, but they are providing additional cash flow for the district, so we will continue to monitor them and keep the board apprised of any changes,” Shearer said.