DALLAS - Standard & Poor's raised the underlying credit rating of the Irving Independent School District to AA-plus from AA as the suburban Dallas district prepares to issue $65 million of school building bonds.
Analysts said the upgrade reflects the district's "good financial management practices, coupled with a strong financial performance trend, as evidenced by very strong reserves."
Southwest Securities Inc. is lead underwriter for the negotiated sale set to price July 16.
Most of the proceeds will fund renovations to the district's 38 campuses, and additional funds will be used for technology upgrades and buses. Irving ISD, which has $510 million of debt outstanding, serves a total enrollment of about 32,000 students.
RBC Capital Markets is the financial adviser to the district and Vinson & Elkins LLP serves as bond counsel.
The higher rating precludes the need for the district to consider bond insurance, at a time when the state's triple-A rated Permanent School Fund isn't available.
Debbie Cabrera, assistant superintendent for business and finance, said officials looked at some recent bond sales by similar-sized school districts rated in the double-A category and felt "they did fairly well."
"We weren't planning on buying insurance anyway, but we're just thrilled to death to be upgraded, especially in today's economy," she said. "We think it shows prospective bond buyers that the district is a strong credit and good investment."
The district's fiscal 2009 taxable-assessed value rose 6.1% from a year earlier to $10.2 billion.
Irving ISD reported another surplus for fiscal 2008, resulting in an unreserved general-fund balance of $73.7 million "or a very strong 34.7% of operating expenditures," and officials project another surplus of $800,000 for this year, according to Standard & Poor's.
Moody's Investors Service assigned its Aa3 rating to next week's sale, citing the district's sizeable tax base, its location in the middle of the Dallas-Fort Worth metroplex, and stable financial operations with an elevated debt profile.
Fitch Ratings does not rate the district.
