DALLAS - The Northwest Independent School District in Texas is coming to market next week with the final tranche of debt from a 2005 bond package, as it prepares to start its next wave of construction to house an enrollment expected to double in the next five years.
The suburban Fort Worth district plans to offer about $57.2 million of unlimited-tax school building and refunding bonds Tuesday through a negotiated sale led by RBC Capital Markets. Morgan Keegan & Co. and Southwest Securities Inc. are co-managers.
First Southwest Co. is the financial adviser to the school system and McCall, Parkhurst & Horton LLP is bond counsel.
The refunding bonds, which take out some capital appreciation bonds from Series 1990 and 1997, are expected to result in savings of about $2 million for the district, according to chief financial officer Jon Graswich.
The bonds, which will be backed by the triple-A enhancement of the state's Permanent School Fund, are structured as serials reaching final maturity in 2033.
Northwest ISD carries underlying ratings of AA-minus from Fitch Ratings and A2 from Moody's Investors Service, although Graswich said an upgrade to A1 from Moody's may be coming before next week's sale.
He also expects the district will be bringing debt to market consistently each spring for the next two decades to house the swelling enrollment.
"We'll probably be issuing bonds every May until the cows come home ... and die ... and we get more cows," he said.
This sale exhaust a $224.5 million authorization that voters approved in October 2005, and the $54.5 million of new-money proceeds will fund completion of a new high school and middle school, as well as additions and roof replacements at other campuses.
Earlier this month, 72% of district voters approved a $260 million bond package for seven new elementary schools and a middle school, technology upgrades, and renovations to existing facilities.
Officials plans to issue the first tranche of that authorization next spring with a $90 million sale.
"We project that over 92% of this bond will accommodate students who are not yet enrolled in Northwest," superintendent Karen Rue said in a release. "With demographics indicating that the district could reach 90,000 students by 2027, it is plausible that a bond election could be held every three years, with two new schools opening each year for the next 20 years."
Following next week's sale the district will have about $457 million of debt outstanding. And Moody's analysts expect the "debt burden will remain elevated for the foreseeable future given the district's ambitious debt issuance plans and slow rate of principal retirement," despite the expected substantial growth in the tax base.
A 20-year plan drawn by the district's planning committee calls for 28 new schools to accommodate anticipated growth. The district's taxable assessed value has nearly doubled the past five years to $8.2 billion for fiscal 2008 from $4.2 billion in 2004.
Northwest ISD, which is about 15 miles north of downtown Fort Worth, currently serves 11,940 students at 17 campuses in 14 municipalities across Tarrant, Denton, and Wise counties.
