The Charleston County School District sold $141 million in bonds to refund a previous issuance and achieve debt service savings.
The bonds mature between 2023 and 2028, yielding between 2.76% and 3.21%. They pay interest at 5%. The securities received a rating of AA- from S&P Global Ratings and Aa3 from Moody’s Investors Service, which assigned a stable outlook.
“The stable outlook on the long-term ratings reflects the likelihood that the district’s financial position will remain solid and in line with the rating category over the near term, given its prudent fiscal management and strong revenue base,” according to Moody’s.
The issuance follows the finalization of the school district’s budget for the upcoming fiscal year. The $1.4 billion budget includes 10% pay increases for teachers and higher property taxes for businesses, cars, and non-occupied homes. As a result of the higher budget, taxpayers in the county will pay $15 million more than they did last year, according to the school district.
South Carolina’s constitution requires school districts to limit their debt to 8% of assessed property value. Of its $413 million limit, the Charleston County School District has $173 million in debt capacity remaining. The debt service savings created by this week’s bond issuance could add to the remaining debt capacity, increasing the amount the district can spend on capital improvements.
The district enrolls 44,754 students in Charleston County. It includes Charleston, the biggest city in South Carolina.
Wells Fargo Bank, NA served as underwriter on the issuance, purchasing the bonds for $150 million. The price reflected a premium of $9 million.