LOS ANGELES — Standard & Poor's upgraded San Jose-Evergreen Community College District's general obligation bonds to AA from A-minus.
The upgrade comes ahead of plans to sell $100.8 million of series 2014A and 2014B refunding GO bonds, and $151.6 million of series 2014C GO bonds.
"The raised rating reflects our view the district's improved financial performance and reserve levels," said Standard & Poor's credit analyst Misty Newland.
Located in the northeastern Santa Clara Valley, the district encompasses more than 300 square miles and includes the areas served by Milpitas and San Jose Unified School Districts, together with the Eastside Union High School District.
The district includes two colleges — Evergreen Valley College and San Jose City College.
Its bonds are secured by unlimited ad valorem taxes levied on taxable property with the district. The Santa Clara County Board of Supervisors has the power and obligation to levy these taxes at the district's request for bond repayment.
Standard & Poor's included as credit strengths of the district its location in the heart of Silicon Valley and access to a broad and diverse economy, its maintenance of strong reserves, and the inherent operational flexibility of community colleges given their ability to control class sections and curriculum offerings.
Analysts also said San Jose Evergreen has a moderate overall debt burden.
"The stable outlook reflects our view of the district's ability to reduce expenditures and sustain improved reserve levels," analysts said in the credit report. "The stable outlook is also supported by a broad and diverse economy that exhibits very strong incomes."