The Austin, Texas, Independent School District sold $692 million in bonds to finance upgrades to its schools.
The bonds mature between 2026 and 2049, yielding between 2.66% and 4%. They received a rating of Aaa from Moody’s Investors Service and AAA from Kroll Bond Rating Agency.
“The Aaa issuer rating reflects the district’s large local economy with notable institutional presence, and above-average resident income,” Moody’s analysts wrote.
The district will use the bond proceeds to fund 25 modernization projects that voters approved in 2022, including new campuses and major renovations. That authorization included $2.4 billion worth of bonds, mostly earmarked for modernization projects.
Some of those projects will end the school district’s experiment with so-called open concept campuses. These schools, mostly built in the 1970s, did not have doors or full walls. The school district is now putting $33.4 million toward renovations that enclose classrooms at three elementary schools, according to the official statement accompanying the sale of the bonds.
The bonds are direct obligations of the district, payable by property taxes. The district now has $2.7 billion in such debt outstanding.
Cabrera Capital Markets LLC served as lead underwriter on the issuance, purchasing the bonds with a discount of $3.1 million. PFM Financial Advisors LLC and Nickel Hayden Advisors acted as municipal advisors.