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Alabama Town Issues $90 Mln in Bonds

By Munichain News Desk

A town in central Alabama sold more than $90 million in bonds to make improvements to its public schools. 

The bonds, issued by Pike Road, Alabama, received a rating of AA+ from S&P Global Ratings. They mature between 2024 and 2052, with yields between 2.61% and 4.08%.

Proceeds from the sale “shall be used to pay the costs of various public school capital improvements and equipment to be acquired, constructed and equipped within the Town,” according the official statement accompanying the sale of the bonds.

The improvements come as Pike Road, which lies within Montgomery County, experiences a tax windfall. Tax revenue in the town has more than doubled in the past five years, and its population has grown 32-fold since 2000.

It has used a significant portion of that revenue to build its public school system, where enrollment has grown 142% in the past seven years. In 2022, the town’s general fund spent $429,898 on education, compared to $52,426 in 2019.

Since 2012, the town has maintained a property tax that allows it to service debts related to education improvements. The bonds will be backed by the full faith and credit of Pike Road, but not by Montgomery County or the state of Alabama. The most recent issuance will add to the $55 million in outstanding debt the town had accumulated by September 2022, the end of its fiscal year. 

Stifel, Nicolaus & Company, Inc served as lead underwriter on the issuance.

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