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El Segundo Unified School District Issues $33 million in Measure ES Bonds

In preparation for this sale, the District achieved bond ratings of “Aa2” from Moody’s Investors Service and “AA-” with an outlook of stable from Standard and Poor’s. The rating agencies cited the District’s maintenance of strong reserves, consistent financial performance supported by long-term investment and capital planning, good management policies and practices, and a stable trend of student enrollment and average daily attendance.

The District’s strong performance and solid credit ratings helped attract strong investor interest, attracting six different investors on the day of the sale. In addition, the District sold its bonds during a historically low interest rate environment. The Series B bonds have a borrowing cost (true interest cost) of 2.11% with a final maturity in 2050. This is more than a full point lower than the very competitive true interest cost for the Series A issuance of 3.15%.  The District estimates that the new maximum tax rate will not exceed $48.00 per $100,000 of assessed value throughout the life of the Measure ES bond program. The $33 million was issued as traditional current interest bonds and not capital appreciation bonds.

The Series B bonds generated $33 million in project proceeds, which will be used for upgrades to school facilities including, but not limited to, a new gym at the middle school, a library renovation at the high school, a new classroom building at Richmond Street School and media center upgrades and improvements at Center Street School.

10/1/10