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Texas School District Issues $550 Million in Bonds

By Munichain News Desk

A school district north of Houston, Texas, sold $550.4 million in bonds to finance various capital improvements.

The bonds, issued by the Conroe Independent School District (ISD), mature between 2025 and 2049, yielding between 2.4% and 4.14%. They received an enhanced rating of AAA from S&P Global Ratings and Aaa from Moody’s Investors Service. S&P assigned an underlying rating of AA+, and Moody’s assigned an underlying rating of Aa1.

“The Aa1 issuer rating reflects the district’s healthy local economy located within the Houston (Aa3 stable) metropolitan area, strong income and wealth levels, and a healthy financial position and solid reserves,” Moody’s analysts wrote.

The bond proceeds will fund renovations to several of the district’s schools, safety and security upgrades, and the purchase of school buses.

Conroe ISD enrolls 73,394 students across more than 60 schools. The bonds are general obligations of the district, payable by ad valorem property taxes. Because of this structure, the bonds are susceptible to the whims of the fossil fuel industry.

“In the past, the greater Houston area has been affected by adverse conditions in the oil and gas industry, and adverse conditions in the oil and gas industry and spillover effects into other industries could adversely impact the businesses of ad valorem property taxpayers and the property values in the District, resulting in a reduction in property tax revenue,” the bond documents read.

Raymond James & Associates, Inc served as lead underwriter on the issuance. BOK Financial Securities, Inc acted as financial advisor.

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