Moody’s Investors Service and Standard & Poor’s Upgrade District’s Bond Ratings
Moody's Investor Service (credit: Meg Jetté)
Source: Santa Barbara Unified School District
Santa Barbara Unified School District received Moody’s Investors Service (Moody’s) and Standard & Poor’s (S&P) rating upgrades from “Aa2” to “Aa1” and a “AA-” to “AA,” respectively. Moody’s cited the District’s “solid financials with consistent outperformance of projections” and S&P credited the District’s “very strong available reserves” as factors for the rating upgrades.
The rating upgrades were a part of a financing process where the district sold $70 million of local Measure I & J general obligation bonds to finance capital improvements for the elementary, junior high, and high schools throughout the District. Santa Barbara Unified School District’s general obligation bonds priced extremely competitively and compared to other K-14 general obligation bonds in the market. Investors placed orders for more than three times the total amount of bonds being sold by the District, which resulted in a lower interest cost for the District’s taxpayers.
The District’s bonds were lower in relative yield than comparable transactions from districts with similar ratings. The District’s bonds even priced better than recent financing by an issuer with “Aaa” and “AAA” ratings. The total interest cost was 3.72% for the District’s 25-year bonds. Stradling Yocca Carlson & Rauth LLP acted as Bond and Disclosure Counsel to the District, KNN Public Finance, LLC acted as Municipal Advisor, and Morgan Stanley acted as Underwriter.
In November 2016, Santa Barbara Unified School District received $193 million dollars of bond funds to invest in safe, modernized facilities throughout the district. To date, the district has completed 14 capital investment projects as part of the bond measure facility project plan.