The Austin Community College District issued $174 million in bonds to develop its campuses.
The bonds mature between 2024 and 2053, yielding between 3.07% and 4.14%. The received a rating of AA+ from S&P Global Ratings and Aa1 from Moody’s Investors Service.
“The issuer rating reflects the district’s sizeable and growing tax base that benefits from the vibrant local economy of Austin, as well as the institutional presence of state government and the University of Texas System,” according to Moody’s.
The issuance comes amid growing community college enrollment, despite falling enrollment rates at four-year institutions. While enrollment at community colleges steeply declined during the COVID-19 pandemic, it rose by 0.5% in spring 2023, according to the National Student Clearinghouse Research Center. Enrollment at four-year nonprofit institutions fell by 1.4% during the same period.
The bond proceeds will finance new campuses for two schools in the district and expansions at seven other campuses. The majority of the campus expansions include investment in nursing and skilled trades, which are among the fastest growing fields of study at two-year institutions.
The projects are part of a $770 million capital improvement plan which voters in Austin approved in a referendum last November.
“When you take a look at where our community is growing, it becomes clear that we need to grow our key workforce programs like advanced manufacturing, skilled trades, and nursing to ensure there’s a presence in every region,” Austin Community College District Chancellor Richard Rhodes said in a statement after the referendum passed.
The district manages ten campuses in the Austin area, serving about 100,000 students. The bonds are limited obligations of the district, payable by property taxes.
RBC Capital Markets LLC served as lead underwriter on the issuance, purchasing the bonds for $188 million. The price reflected a premium of $15 million.