DALLAS — The Allen Independent School District is bringing $72.9 million of unlimited-tax school building bonds to market next week to fund a new auditorium and career and technology center, among other projects.
The underwriting syndicate for the negotiated sale includes Morgan Keegan & Co., Wells Fargo Brokerage Services LLC, Bosc Inc., and Southwest Securities Inc. First Southwest Co. is the financial adviser to the suburban North Texas district and Fulbright & Jaworski LLP is bond counsel.
Moody’s Investors Service assigned its Aa3 rating to the bonds and affirmed the rating on about $322 million of debt outstanding. Standard & Poor’s assigned a AA rating. The bonds, which won’t be insured, are structured as serials maturing in 2010 through 2039. Proceeds also will fund class renovations and additions.
“The bonds will go out alone and we’ll rely upon our underlying ratings,” said Mark Tarpley, assistant superintendent, finance and operations.
School bond guarantees provided by the state’s triple-A rated Permanent School Fund have been suspended since March due to declining investment values and capacity limits.
Moody’s analysts said the rating reflects a sizeable tax base “that continues to experience retail and commercial development albeit at a more moderate pace, an historically stable financial position facing near term operating pressures, and elevated debt profile with plans for additional borrowing.”
Standard & Poor’s cited the district’s “very strong wealth and income levels,” good financial management, including long-range capital plans, and strong financial position despite enrollment pressures.
Allen ISD, which is about 25 miles north of Dallas, is nearly 80% built out and enrollment growth has slowed of late to about 3% a year after double-digit gains annually for most of the last decade. The district currently serves nearly 18,000 students.
The school system’s taxable-assessed value averaged 10.6% annual growth the past five years to $6.8 billion for fiscal 2009. Analysts said preliminary estimates project growth of 5% next year to $7.2 billion, attributable to new construction, which offset modest declines in existing property values.
At nearly 83,000, the population of the district is up about 35% from 2005.
One economic driver has been the Village at Allen, which is at the intersection of U.S. 75 and Stacy Road, across the street from a similar development that opened recently — the Village at Fairview.
Combined the two complexes offer more than two million square feet of retail space and one million square feet of office, residential and hotel space. Each has entertainment and dining facilities, as well as a hotel with adjoining convention center.
Village at Allen also has a large sports complex that is home to a minor league hockey team.
District voters approved a $119.4 million bond referendum in May for a new, 18,000-seat stadium, a 1,500-seat auditorium at the district high school, and a new building to house the maintenance, transportation and student-nutrition departments.
Last November, the electorate overwhelmingly approved a $219 million bond package that officials have said should complete the district’s school construction needs.
Tarpley said next week’s sale includes some of both authorizations and the district plans to come back to market again next August with the bonds for the stadium, as part of its five-year construction plan.