DALLAS — The Aledo Independent School District is bringing $61 million of unlimited-tax school building bonds to the market this week on the heels of upgrades from both Fitch Ratings and Standard & Poor’s.
This is the first sale from a $67 million bond package passed in May for a new ninth-grade campus, a technology building, a teacher-training center, and renovations to existing facilities in the small but growing district near Fort Worth. Officials plan to issue the remaining $6 million next year.
Chief financial officer and assistant superintendent for business and operations Chris Whiddon said the upgrades “will certainly lower our interest rates, although the exact savings won’t be known until after the bonds are sold.
“This is just great for us and is economically great for our taxpayers,” she said. “It’s all positive, all stable, and all growing here in Aledo.”
Southwest Securities Inc. is lead manager for the negotiated sale. The underwriting syndicate includes Edward Jones, Frost National Bank, Morgan Keegan & Co., and Raymond James & Associates Inc.
RBC Capital Markets is the district’s financial adviser and McCall, Parkhurst & Horton LLP is bond counsel.
Fitch raised its underlying rating on the district to A from A-minus, citing a “proven ability to maintain strong financial reserves in light of ongoing operating and capital pressures, which enhances its financial flexibility.”
Additional credit strengths include strong tax-base growth and above-average wealth levels.
Standard & Poor’s raised its rating on the district two notches to A-plus from A-minus due to continued growth in the property-tax base and a consistently strong financial position. The higher ratings also apply to about $138 million of debt outstanding.
Both rating agencies assigned a triple-A enhanced rating to the issue due to the backing of the state’s Permanent School Fund.
Aledo is 20 miles west of Fort Worth and most of the school district lies in Parker County with a slice in Tarrant County. Much of the district’s tax base is within workable portions of the Barnett Shale, according to analysts. The natural gas field, which is estimated to be one of the largest in the world, has been a boon to the economies of numerous North Texas communities the past few years.
The Aledo school district’s fiscal 2008 taxable-assessed value rose nearly 35% to $2.59 billion from $1.93 billion a year earlier.
Fitch said there are numerous high-end residential developments springing up in the district and “Aledo is transitioning from an agriculture-based economy to an affluent bedroom community” for the Fort Worth area. Analysts also said estimates show that only 10% of the district is built-out despite the ongoing population growth.
Standard & Poor’s analysts also said the district’s access to the Fort Worth-Arlington metropolitan area and assessed-value growth is leading to a changing property-tax base that’s becoming more suburban and less agricultural and rural.
The district’s 2008 total population is about 17,300. At nearly 5,000 students, enrollment at the district’s schools is up nearly 40% since 2002. Whiddon said officials project roughly 4% to 5% annual enrollment growth to continue.