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California Community College Sells More Than $120 Mln in Bonds

By Munichain News Desk

A community college district in California issued $127 million in bonds to refund a previous issuance and make improvements to its facilities.

The bonds, issued by the Kern Community College District, mature between 2024 and 2040, yielding between 2.51% and 3.34%. They received a rating of Aa2 from Moody’s Investors Service and AA from S&P Global Ratings.

“The Aa2 rating is supported by a large tax base that exhibits moderate concentration in oil and agriculture and shows continued diversification, and a below average wealth profile,” according to Moody’s.

The issuance comes amid rising enrollment in the Kern Community College District, which is one of the United States’ largest by area. That increase makes Kern an outlier in the United States, where enrollment in community colleges is on the decline. 

The district consists of three schools in Kern, San Bernardino, and Tulare Counties: Bakersfield College, Cerro Coso Community College, and Porterville College. The three schools have an enrollment of almost 24,000 full time equivalent students, about a third more than attended the district’s schools a decade ago. Nationally, enrollment at community colleges has fallen by 37% since 2010, according to the National Student Clearinghouse Research Center.

Improvements to the district’s facilities will include a renovation to the gym and sciences building at Bakersfield College and upgrades to the stadium at Porterville College. 

The bonds are general obligations of the district, backed by its full faith and credit and secured by property taxes.

Stifel, Nicolaus & Company, Inc served as lead underwriter on the issuance, purchasing the bonds for $147 million. The price reflected a premium of almost $20 million.

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