Fort Worth ISD To Offer $271M for Refunding, New Projects

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DALLAS - Fort Worth Independent School District will return to the bond market with $271 million of refunding and school construction bonds that carry the Texas Permanent School Fund's triple-A guarantee.

The bonds, structured to mature from 2016 to 2040, are expected to price March 24 through negotiation with JPMorgan as book runner. Raymond James is co-manager with Estrada Hinojosa & Co., and Siebert, Brandford, Shank & Co.

First Southwest Co. vice chairman David Medanich and managing director Laura Alexander are financial advisors.

The Fort Worth bonds will come to market a day before Northeast Independent School District in the San Antonio area offers $390 million of bonds. Those bonds will also carry the PSF triple-A guarantee.

The Fort Worth district carries underlying ratings of AA from Standard & Poor's and Aa1 from Moody's Investors Service with stable outlooks.

Moody's analyst James Hobbs said the rating "reflects strength in the district's sizeable tax base, the majority of which is the City of Fort Worth that has experienced stable growth in each of the last four years, stable annual enrollment growth over the last several years, and healthy financial performance and liquidity despite a liability to the Texas Education Agency for miscalculation of its average daily attendance."

Moody's reported in late 2014 that the district owes the TEA $27.5 million of state aid because the district miscalculated its average daily attendance since fiscal 2011. The investigation cited a software error in the district's enrollment reporting system that led to the inflated attendance numbers and additional state funding to the district.

"District officials report the reporting error has been resolved and does not anticipate any similar issues moving forward," Hobbs wrote in the March 20 ratings report.

The district is seeking a superintendent after Joel D. Boyd, superintendent of the Santa Fe, N.M., school district withdrew. Boyd, 36, was the finalist for the Fort Worth job, but some board members questioned whether he had enough experience for the job.

With this issue, FWISD will have $832.5 million in unlimited tax bonds outstanding. The district's debt burdens are 2.4% direct and 4.2% overall of fiscal 2015 assessed valuation, ratios that Moody's considers "manageable."

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