The Los Angeles Community College District issued $575 million in bonds to improve its facilities.
The district sold the bonds in two series. The Series M bonds, consisting of $175 million, mature between 2024 and 2038, yielding between 2.53% and 3.03%. The Series D bonds, consisting of $400 million, mature between 2024 and 2030, yielding between 2.53% and 2.89%. All of the bonds pay interest at 5%. The securities received a rating of Aaa from Moody’s Investors Service and AA+ from S&P Global Ratings.
“The Aaa rating reflects the district’s massive and diverse tax base that will continue to benefit from solid growth, strong property wealth and slightly below-average resident income,” Moody’s analysts wrote.
The issuance comes as the district considers proposals to build on-campus student housing at three colleges. Demand for on-campus housing is high, with 14% of students saying they do not have housing or are housing-insecure, according to a 2022 survey.
In October, the district hosted several town halls aimed at informing the proposals, which are expected in early 2024. The projects are not expected to be completed before 2028.
Proceeds from the Series M and Series D bonds are eligible to fund a variety of improvements, including technology upgrades, sustainable construction initiatives, and modernization projects. A different bond measure, known as Measure L.A., will fund the student housing projects.
The bonds are voter-approved general obligations of the district, payable by property taxes.
BofA Securities, Inc served as lead underwriter on the issuance, purchasing the bonds for $626.1 million. The price reflected a premium of $52.5 million and a discount of $1.4 million. KNN Public Finance served as municipal advisor.