A school district in the suburbs of Cleveland, Ohio, issued $102.7 million in bonds to finance renovations to its schools.
The bonds, sold by the Shaker Heights City School District, mature between 2025 and 2061, yielding between 2.76% and 4.49%. They received a rating of AA from S&P Global Ratings, which downgraded the district from AA+.
“The lowered rating reflects our view that the district’s credit profile has weakened, given the expansion of the district’s debt profile to a level that no longer offsets key economic measures that already lagged those of peers,” S&P analyst Stephanie Megas said in a press release.
The issuance is the first under Shaker Heights City School District’s latest bond authorization, which voters approved last November. In that referendum, voters authorized $121.2 million in bonds.
The district will use the bond proceeds to renovate a middle school and five elementary schools.
The bonds are general obligations of the district, backed by its full faith and credit and payable by property taxes. The district plans to use the remaining $18.5 million in authorized debt by issuing certificates of participation to fund the renovation of a building that will house Shaker Heights’ pre-kindergarten program.
The bonds are general obligations of the district, backed by its full faith and credit and payable by property taxes.
Stifel, Nicolaus & Company, Inc served as lead underwriter on the issuance, purchasing the bonds for $111.6 million. The price reflected a premium of $9 million. Baker Tilly Municipal Advisors, LLC acted as financial advisor.