DALLAS — The Louisiana Community and Technical College System will continue its capital improvements effort at its campuses across the state with proceeds from the negotiated sale of $68.7 million of revenue bonds on Aug. 23.
The Louisiana Local Government Environmental Facilities and Community Development Authority will issue the bonds, which are supported through annual appropriations by the state Legislature.
Next week’s tranche is the second from $200 million of bonds lawmakers authorized in 2007.
The bonds were approved by the State Bond Commission in May 2009.
“The legislation referenced the project list of some $170 million,” said Joe Mayeaux, vice president with Sisung Securities Corp., the financial adviser to the college system. “The $200 million approved by the Bond Commission includes the debt reserve fund and costs of issuance.”
The bonds are rated A-plus by Standard & Poor’s and A1 by Moody’s Investors Service.
Morgan Keegan & Co. is the senior underwriter on the sale. Other managers include Coastal Securities Inc., Crews & Associates Inc., Doley Securities LLC, and Stephens Inc.
Bond counsel is Jones, Walker, Waechter, Poitevent, Carrère & Denègre LLP.
The authority issued $64.6 million of revenue bonds in August 2009, and plans a third and final tranche of approximately $55 million in 2011, Mayeaux said.
The upcoming sale was originally set for Aug. 17, but the deal was delayed by a week due to the state going to market with $435 million of fuel tax bonds on the same day, Mayeaux said.
“We didn’t want to conflict with that big sale,” he said.
Jan Johnson, senior vice president for finance and administration at the system, said the proceeds would be used to develop facilities for a rapidly growing number of students, and replace and upgrade facilities damaged by Hurricane Katrina in 2005.
Work is under way or completed on the first phase of the capital program, Johnson said. A third phase, financed with the planned 2011 sale, will complete the effort.
The Delgado campus in New Orleans has never reopened after it flooded in the aftermath of the storm, Johnson said, and other facilities sustained damage. The proceeds from this sale and the 2009 sale will enable the college to relocate to a new campus.
“We will be renovating some buildings, adding amenities to several facilities that were rebuilt with money from the Federal Emergency Management Agency, and acquiring new land for future development,” she said.
The new facilities are needed to meet the demand from students, and from employers seeking workers with technical skills.
“We added 8,000 students to our enrollment last year,” Johnson said. “That’s the equivalent of a new community college, and it is larger than many four-year schools.”
Johnson said enrollment has increased by 50% since 2005, with 17% and 10% increases posted over the past two years. Total student population could approach 80,000 by the fall semester, she said.
The authority will loan the proceeds to the college system, which will then lease the property to the LCTCS Facilities Corp., which was established to finance and build the college projects. The facilities corporation will lease the projects to the college system at a rate sufficient to meet debt service requirements.
The state has agreed to appropriate sufficient funds to meet lease payments.