DALLAS — The Austin Independent School District plans to offer $100 million of unlimited-tax school building and refunding bonds next week to take out some commercial paper.

Morgan Stanley is lead manager for the negotiated sale, of which $82 million will refund the notes and $18 million will be used for various capital improvements.

The rest of the underwriting syndicate includes Barclays Capital, Citi, Morgan Keegan & Co. and Siebert Brandford Shank & Co.

The PFM Group is the financial adviser to the fourth-largest school system in Texas. Andrews Kurth LLP and Escamilla & Poneck Inc. are co-bond counsel

The bonds, which won’t be insured, are structured as serials maturing in 2010 through 2034. The district tends to issue commercial paper notes and then refund that debt taking it out to longer maturities.

Standard & Poor’s assigned a AA-plus rating to the issue, citing the district’s diverse and expanding regional economic base, sound financial position, and moderate debt levels. Analysts said the district’s economy is strengthened by the presence of the state government and the University of Texas.

Austin ISD’s financial position “continues to trend very well” the past few years, according to Standard & Poor’s. The fiscal 2008 general fund balance of $130 million is double fiscal 2006 and a sharp increase from prior years, “when budgetary pressures necessitated the planned drawdown of reserves,” analysts said.

The district’s fiscal 2009 taxable-assessed value of $61.15 billion if up 15.5% from the prior year and nearly 77% higher than the $34.61 billion in 2000.

Fitch Ratings assigned a AA rating to next week’s sale and affirmed the rating on the district’s $683.6 million in parity debt outstanding. Analysts said the rating reflects the Austin ISD’s “moderate debt levels and capital needs, above-average debt amortization, sound financial position, and healthy local and regional economies.”

Moody’s Investors Service affirmed its underlying Aa1 rating.

In May, voters approved three bond propositions worth $343.7 million. Proceeds from the debt will fund land acquisition for a high school in the southern part of the district, a fine arts center at another high school, acquisition of low-emissions school buses, improvements to increase energy efficiency at numerous schools, upgrades to cafeteria and kitchens, as required by the Health Department, and construction of a new early-childhood center.

Following next week’s sale, the district will have about $404.3 million of authorized but unissued debt, which includes part of a $519.5 million bond package passed in 2004.

Austin ISD serves about 83,730 students in 78 elementary schools, 18 middle schools, 12 high schools and seven other campuses.  Some projections show continued enrollment growth to 103,000 students in 2015.

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