The Sacramento City Unified School District sold $75.8 million in bonds to refund previously issued securities.
The district sold the bonds in two series. The 2024 Series A bonds mature between 2024 and 2036, yielding between 2.6% and 3.2%. The 2024 Series B bonds mature between 2024 and 2048, yielding between 2.58% and 4.1%. The securities received a rating of A3 from Moody’s Investors Service and AA from S&P Global Ratings.
The rating “reflects California school district GO bond security features that include the physical separation through a ‘lockbox’ for pledged property tax collections and a security interest created by statute,” Moody’s analysts wrote, referring to general obligation bonds.
Proceeds from the bond sale will refund securities the school district sold in 2013.
Soon after the issuance, the district and its largest teachers union agreed to a two-year contract. The deal will increase teacher salaries and decrease class sizes.
Previous agreements with the teachers union have led county officials to warn of straining district finances, including a threat to future reserves. No such warning accompanied the most recent agreement, which included a 6% pay raise for teachers.
The Sacramento City Unified School District is the twelfth-largest in California, enrolling 37,289 students, according to the official statement accompanying the sale of the bonds. The bonds are general obligations of the school district, payable by property taxes.
Loop Capital Markets LLC served as underwriter on the issuance. Dale Scott & Co, Inc acted as municipal advisor.