The Hopkins County School District Finance Corporation sold $34.3 million in lease revenue bonds to finance improvements at district schools.
The bonds mature between 2024 and 2051, yielding between 2.9% and 4.37%. They received a rating of AA from S&P Global Ratings and A1 from Moody’s Investors Service, which assigned a mark one notch lower than the district’s standard issuer default rating.
The lower rating reflects “the risk of non-appropriation of annual rental payments for debt service on the lease revenue bonds and the essential nature of the leased assets (school facilities) secured by a statutory mortgage lien,” Moody’s analysts wrote.
The bond proceeds will fund the construction of a middle school addition to a district elementary school and renovations at the gyms, storm shelters, and support facilities at two high schools. The bond sale will also finance the acquisition of a site that will host a new central office for the school district.
The issuance comes after two summers of disastrous flooding in Kentucky, spurring local officials across the state to push for bolstered storm shelters. Last summer, a county in western Kentucky set a state record for one-day rainfall, according to the National Weather Service. In 2022, storms in the state’s east led to extreme flooding that killed 43 people.
Hopkins County is a rural county in western Kentucky, with a population of about 45,000 people. The bonds are special obligations of the corporation, payable by annual lease rental payments by the school district.
The bonds will nearly double the district’s debt, bringing its total debt outstanding to about $75 million.
J.P. Morgan Securities LLC served as underwriter on the issuance, purchasing the bonds for close to par. Robert W. Baird & Co Inc acted as financial advisor.