DALLAS — In its second refunding of the year, Dallas Independent School District will bring $222.6 million to market in a negotiated deal Dec. 2.
With this issue, DISD will have refunded more than $555 million of its $2.5 billion of outstanding debt in 2014.
The 2014B bonds carry underlying ratings of Aa1 from Moody's Investors Service. Standard & Poor's rated the district's previous refunding deal AA-minus. Outlooks are stable.
With a guarantee from the Texas Permanent School Fund, the bonds will carry an enhanced rating of AAA.
Morgan Stanley is senior manager on the negotiated deal with JPMorgan, Southwest Securities and Ramirez & Co. as co-managers.
The bonds refund issues from 2006 and 2008 for interest rate savings.
"The district has a high direct debt burden and although new debt is expected, tax base growth is expected to keep the debt burden stable," according to Moody's analyst John Nichols.
DISD's population grew by 3.5% to 1.02 million between the 2000 and 2010 censuses, but Moody's noted that the population was below average wealth indicators, which is typical for large urban school districts.
"Enrollment has historically hovered near 157,000, but increased 0.9% to 158,932 in fiscal 2013 and 0.5% to 159,713 in fiscal 2014," Nichols reported.
"Moody's notes the district could possibly change its current governance structure in the near term future to a home-rule charter," Nichols said.
The district received the 25,000 required signatures from eligible voters within the district to draft a home-rule charter and place the question before district voters.
"Any changes to the district's governance structure will be incorporated in future credit reviews when, and if, they are approved and subsequently enacted," Nichols said.
