A school district in Indianapolis, Indiana, issued $120 million in bonds to make improvements to its schools.
The bonds, sold by the Metropolitan School District of Washington Township, mature between 2025 and 2042, yielding between 3.19% and 4.4%. S&P Global Ratings assigned the bonds an AA+ programmatic rating and AA- underlying rating.
The school district operates 13 schools and a career center. The bond proceeds will finance improvements at almost all of the district’s facilities, including new buildings at the district’s high school and one of the district’s middle schools.
“These capital improvement upgrades will enhance our safety and security, provide technological upgrades, and ensure that our classrooms are designed to meet the latest in educational design trends,” the school district’s website says.
Voters in the school district authorized the bonds in a referendum in 2020. Its passage marked the largest school construction referendum in state history.
The issuance comes amid falling enrollment at Washington Township schools. In the 2018-19 academic year, the district enrolled 11,072 students; enrollment fell to 10,359 last year. The district anticipates that enrollment will continue to steadily drop over the next five years.
Even before the COVID-19 pandemic disrupted education, enrollment at public schools in Indiana had begun to drop as charter schools grew in popularity. In the neighboring Indianapolis Public Schools system, enrollment at charter schools grew by almost 2,000 students between 2018-19 and 2022-23.
Washington Township is entirely within the city limits of Indianapolis. The bonds are payable by property taxes.
Mesirow Financial, Inc served as underwriter on the issuance, purchasing the bonds for $127 million. The price reflected a premium of $7 million