Austin Community College Brings $175M With Voters’ Blessing

austin-cc-highlands.jpg

DALLAS - Austin Community College will price $175 million of limited tax bonds approved by voters last November.

The bonds are expected to price through negotiation with book runner JPMorgan on May 19.

Jorge Rodriguez, managing director at Coastal Securities, is financial advisor. Bickerstaff Heath Delgado Acosta provides bond counsel.

Maturing serially through 2045, the bonds carry ratings of AA-plus from Standard & Poor's and Fitch Ratings and Aa1 from Moody's Investor's Service.

"Fitch expects the overall debt burden to remain moderate," analyst Rebecca Moses noted. "Capital needs are sizeable, although a recently approved general obligation bond authorization should allow the college to address its most pressing needs."

About 57% of the voters approved $386 million of general obligation bonds, mostly for renovation and expansion of existing facilities. One of the district's showcase projects, the new Highland Campus that repurposes a former shopping mall, was already underway when voters cast their ballots.

However, voters rejected a higher tax cap, which would have raised the tax rate 1 cent each in fiscal years 2016, 2018 and 2020. It narrowly failed with 49% of voters supporting it.

District officials anticipate issuing the remainder of the bond authorization annually through fiscal 2017 which is expected to require a maximum 2-cent tax rate increase under what Fitch considers reasonable tax-base assumptions.

"Fitch does not expect issuance of the full GO bond authorization to have a significant impact on overall debt ratios," Moses said. "Overall debt levels remain relatively moderate at approximately $4,274 per capita or 4.8% of market value. Principal amortization of the district's tax-supported debt remains slow with 32% retired in 10 years."

For reprint and licensing requests for this article, click here.
Higher education bonds Texas
MORE FROM BOND BUYER