The Denton Independent School District issued $949 million in bonds to build new schools.
The issuance contained $439 million in serial bonds, maturing between 2024 and 2043 and yielding between 2.84% and 3.8%, and $510 million in term bonds. The securities pay interest at 5%. They received an enhanced rating of AAA and unenhanced rating of AA from S&P Global Ratings and from Fitch Ratings.
The rating reflects “the district’s superior financial resilience, based on solid expenditure flexibility, limited historical revenue volatility and sound operating reserves,” according to Fitch.
The issuance will finance the largest capital improvement plan in the district’s history. Voters authorized the district to issue more than $1.4 worth of bonds in a May referendum, which passed with 62% of the vote.
The bonds will fund the construction of three new elementary schools, a new high school, and a new technology center. The bonds will also pay for new campuses for two older elementary schools and renovations at all 38 schools in the district.
Affordable land and location within the Dallas-Fort Worth Metroplex have stimulated strong population and enrollment growth in the school district over the past two decades, according to Fitch. The school district now serves about 225,000 residents of Denton County, which is about 40 miles north of Dallas and Fort Worth.
The bonds are direct obligations of the district, payable by property taxes. Denton sold $150 million in bonds earlier this month to make infrastructure and public safety improvements.
Piper Sandler & Co served as lead underwriter on the issuance, purchasing the bonds at a discount of $4 million.