LOS ANGELES — A King County, Wash. school district is expected to sell $100 million of unlimited tax general obligation bonds next week to finance improvements to schools throughout the district.
The Bellevue School District, located east of Seattle and serving more than 18,000 students, is planning to sell the bonds on Tuesday in a competitive offering.
The bonds, which are secured by the district's full, faith and unlimited property tax pledge, have been assigned underlying ratings of Aaa from Moody's Investors Service and a AA-plus rating from Standard & Poor's. Both agencies assign a stable outlook.
Moody's and S&P also assigned credit enhanced ratings of Aa1 and AA-plus, respectively, based on the district's participation in the Washington State School District Credit Enhancement Program, under which the state pledges its full, faith, credit, and taxing power to guarantee debt service on the bonds.
"The district's high rating primarily reflects its large and affluent tax base and manageable debt profile," Moody's analysts said. "The rating also incorporates a financial position at adequate levels below rated peers which is buttressed by strong management with a demonstrated ability to make budgetary adjustments to ensure fiscal balance."
The enhanced Aa1 rating reflects the pledge of the State of Washington, rated Aa1 with a stable outlook, strong state oversight of local school districts, and strong program mechanics, Moody's said.
Standard & Poor's rating is also based on the district's economic base, as well as strong wealth and incomes and strong available general fund reserves.
The district's already elevated carrying charges and significant future capital needs offset these strengths, Standard & Poor's said.
The Bellevue School District serves the city of Bellevue and surrounding areas, including portions of Kirkland, Newcastle, and Redmond. District residents benefit from its location with the Seattle metropolitan area, analysts said.
Proceeds of next week's bond sale will finance the costs of construction and improvements for up to nine schools in the district.
Projects include the rebuilding of three elementary schools, the modernization of Bellevue High School, the modernization of the academic facility portion of Sammamish High School, and the modernization of up to four middle schools.
The issuance was authorized by voters in an election on March 2008, which authorized the district to issue $545 million of unlimited tax general obligation bonds.
The bonds will mature in 2014 through 2032.
Piper Jaffray is financial advisor and K&L Gates LLP is bond counsel.