The San Diego, California, Unified School District issued $251 million in bonds to refinance outstanding bonds.
The school district sold the bonds in five series. Maturities range from 2028 through 2047, and yields range from 2.49% to 3.71%. All of the bonds pay interest at 5%. The securities received a rating of AAA from Fitch Ratings, AAA from Kroll Bond Rating Agency, and Aa2 from Moody’s Investors Service.
The rating reflects the school district’s “large, growing and diverse tax base supporting bond repayment,” Fitch analysts wrote.
The San Diego Unified School District is one of the largest in the United States and the second-largest in California, after the Los Angeles Unified School District. It includes close to two hundred institutions and enrolls almost 100,000 students, excluding charter schools and their enrollment, according to the official statement accompanying the sale of the bonds. Still, enrollment has fallen in recent years; the district educates 30,000 less students than it did a decade ago.
The school district recorded $2.8 billion in total operating revenue last fiscal year. However, it warned in the bond documents that “losses in enrollment will cause a school district to lose operating revenues without necessarily permitting the district to adjust fixed operating costs.”
The school district will use the issuance proceeds to achieve debt service savings by refinancing some of its outstanding bonds.
The bonds are general obligations of the school district, payable by property taxes.
Jefferies LLC and Siebert Williams Shank & Co, LLC served as underwriters on the issuance. KNN Public Finance, LLC acted as municipal advisor.