The school system of Cherokee County, Georgia, sold $100 million in bonds to finance improvements to its facilities.
The bonds mature between 2024 and 2033, yielding between 2.4% and 2.9%. They pay interest at 5%. The securities received an enhanced rating of Aa1 from Moody’s Investors Service and AA+ from S&P Global Ratings, which assigned an underlying rating of AA. The rating marked an upgrade from Moody’s.
The rating reflects the district’s “very healthy finances” as well as its “affluent resident base, robust tax base growth, and stable enrollment trends,” Moody’s analysts wrote. “All of these factors help mitigate the district’s relatively sizeable capital plans which will contribute to a slight decline in reserves and increase in long-term liabilities over the next two to three years,” they added.
The issuance follows a year in which the school system spent more than double what it has historically spent on capital outlays. The district recorded $53.8 million in such outlays last fiscal year, compared to $19.3 million the year prior, according to the official statement accompanying the sale of the bonds.
The bond proceeds will fund additions and renovations to school system facilities, replacement of existing facilities, and technology upgrades. The district plans to issue an additional $190 million in bonds for these purposes over the next three years, according to the bond documents.
The Cherokee County School System includes 40 schools in a mostly rural area north of Atlanta. The bonds are general obligations of the school system, backed by its full faith, credit, and taxing power.
Mesirow Financial, Inc served as underwriter on the issuance. Davenport & Company LLC acted as financial advisor.