DALLAS - College Station Independent School District in Texas is bringing $37.5 million of unlimited-tax school building bonds to the competitive market Monday to begin funding the design phases of a new elementary campus and another high school.

Southwest Securities Inc. is financial adviser to the central Texas district and McCall, Parkhurst & Horton LLP is bond counsel.

The bonds are structured as serials maturing in 2010 through 2034. Additional proceeds from next week's sale will fund acquisition of buses and construction of a transportation facility among other projects.

Victor Quiroga Jr., vice president at Southwest Securities, said the district normally issues new-money bonds competitively to insure "the most transparency possible," and he anticipates "pretty strong bids" for the debt.

Insurance will be at bidder's option. The state's triple-A rated Permanent School Fund has not been providing school bond guarantees since March due to the declining value of its investments and capacity limits.

"Double-A credits aren't having any trouble selling bonds and they're going out and getting good rates, too," Quiroga said. "But a lot of our A-credit clients are purchasing bond insurance to get to market."

College Station ISD carries underlying ratings of A1 from Moody's Investors Service, AA-minus from Standard & Poor's, and AA from Fitch Ratings.

Moody's also affirmed its rating on about $107 million of debt outstanding and said the rating reflects a large and growing tax base with a moderate debt burden and fast debt repayment. Analysts said the district's credit is further strengthened by healthy financial operations.

Standard & Poor's said its high rating reflects an economic base that is anchored by Texas A&M University and its 48,000 students, as well as strong tax-base wealth, steadily growing enrollment levels, and "very strong fund balances."

Analysts said enrollment increased 19% the past four years to nearly 9,600 students for fiscal 2009.

Amanda Dotson, the district's chief financial officer, said the district experienced 6% enrollment growth last year after historically seeing gains of 3.5% to 4%.

"It will be interesting to see what happens next year ... if we'll have another 6% gain or if we'll revert back to the more traditional levels of growth," she said.

Standard & Poor's also said the district's undesignated fund balance of $18.3 million, or 26% of operating expenditures, "is very strong, in our view."

The district's taxable-assessed value averaged 11.4% annual growth the past five years for a cumulative gain of 70% to $5.57 billion for fiscal 2009, according to analysts.

The area has grown significantly the past few decades. The city of College Station's current population of about 91,300 is up nearly 34.5% from the start of the decade and 145% higher than the 1980 Census figure of about 37,200 residents.

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