DALLAS — A week after Standard & Poor’s elevated Richardson’s credit to AAA, the agency raised its rating on the suburban city’s school system to AA-plus.
Next week, Richardson Independent School District plans to offer $35 million of unlimited-tax school building bonds through a negotiated sale led by RBC Capital Markets.
Analysts upgraded the underlying of the district to AA-plus from AA due to “long-term trend of strong financial operations despite state funding constraints, resulting in a very strong general fund position.” A bump up to triple-A is precluded by the district’s modest revenue-raising flexibility under the state’s new school finance legislation regarding maintenance-tax rates, according to Standard & Poor’s.
Richardson ISD has been designated as a property-wealthy district under Texas’ school finance system since 1994. This means it returns a portion of property tax revenue collected back to the state, which then distributes that to property-poor districts across Texas.
Despite nearly complete residential development in the city, the school district’s taxable-assessed value managed to climb 10% the past five years to $17.32 billion for fiscal 2008.
The underwriting syndicate for next week’s sale also includes Banc of America Securities LLC, Morgan Keegan & Co., and Southwest Securities Inc.
First Southwest Co. is the financial adviser to Richardson and Vinson & Elkins LLP is bond counsel.
The Series 2008 bonds, which also come to market with the triple-A wrap provided by the state’s Permanent School Fund, are structured as serials reaching final maturity in 2033.
Next week’s issue is the third from a 2006 authorization of $145.4 million, and the school district will have $38.4 million of unissued debt remaining following the sale. Richardson ISD, which has about $430.7 million of debt outstanding, includes most of Richardson, as well as parts of Dallas and a small sliver of Garland. About 60% of the district is in Dallas. The total population within the school district is nearly 250,000. The district serves more than 34,000 students at 55 campuses. Enrollment has remained relatively flat throughout the past decade.
Adjacent with Dallas to the north, Richardson is home to about 102,000. The city’s population is up more than 11% since 2000, and the city sits in both Dallas County and Collin County each of which carry natural triple-A ratings.
Once a typical, highly residential suburb, Richardson has evolved into a major employment center over the past 30 years with a “significant presence of technology-based companies” especially telecommunications firms and “very strong income and wealth levels,” according to analysts.
Moody’s Investors Service rates the Richardson ISD at Aa1 rating while Fitch Ratings doesn’t rate the credit.