A school district in southern New York issued $76 million in so-called bond anticipation notes. The notes, issued by Horseheads Central School District in Chemung County, will allow the district to redeem and renew previous notes to finance the construction of additions to the district’s buildings and facilities.
The notes mature on June 21, 2024. They yield 3.7% and have a coupon rate of 4.75%.
The notes received a rating of MIG1 from Moody’s Investors Service. However, the notes were sold as non-rated to the underwriters. The district’s outstanding general obligation bonds received a rating of A+ from S&P Global Ratings.
“The proceeds of the notes, together with $3,195,000 available funds of the district will redeem and partially renew $79,680,637, bond anticipation notes maturing June 22, 2023 and issued for the aforementioned purpose,” according to the official statement accompanying the sale of the bonds.
The issuance comes amid a plan, known as the I-86 Corridor Project, to fuel business development in New York’s southern tier. Part of that plan, named for the highway that runs through the region, calls for greater investment in education.
The district is about 10 miles north of the New York-Pennsylvania border. Over the past two decades, Chemung county has lagged behind state averages in economic growth. In 2000, the county had a per capita income of $25,329, beating the state’s per capita income of $23,389. By 2021, Chemung county had a per capita income of $31,379, while the state had a per capita income of $43,208.
In 2011, a working group called the Regional Economic Development Council of the Southern Tier found that the region lacked the basic infrastructure to support economic growth and that its workforce was undereducated to meet industry needs.
The notes are general obligations on the district, backed by its full faith and credit. The issuance will be financed by property taxes.
Jefferies LLC served as lead underwriter on the issuance.