← Back to Latest News

Mississippi Sells $37 Million in School Bonds

By Munichain News Desk
News
Share

The Mississippi Development Bank sold $37 million in bonds to finance the purchase of a bond issued by a school district in the state’s north.

The bonds mature between 2026 and 2044, yielding between 2.73% and 4.02%. They received a rating of AA from S&P Global Ratings, which upgraded the bonds from AA-.

The bank will use the proceeds from the issuance to buy a bond issued by Oxford School District. The district will in turn use the money from the bond sale to renovate its schools and athletic facilities.

“The upgrade reflects our view of the district’s improved financial management policies and practices and overall financial position as well as its continued economic growth,” S&P analyst Allie Jacobson said in a press release.

The Mississippi legislature created the state’s development bank in 1986 to issue bonds for municipalities at “more favorable terms” than the municipalities could achieve if they issued their own debt. These bonds are generally secured by a lien on the local government’s revenue and often contain a moral obligation pledge from the state of Mississippi.

That means that the bank’s bonds are somewhat tied to Mississippi’s overall credit rating, which S&P downgraded last week. The ratings agency cited “elevated credit risks stemming partly from persistently weak economic and demographic trends.”

The 2024 bonds are special and limited obligations of the bank and general obligations of the school district, secured by its full faith and credit.

Raymond James & Associates, Inc served as underwriter on the issuance, purchasing the bonds for $41.4 million. The price reflected a premium of more than $4 million. MuniGroup, LLC acted as municipal advisor.


Subscribe to the Munichain Newsletter

The latest municipal bond market news and insights delivered to your inbox weekly.