DALLAS — The Houston Community College System is maximizing taxpayer dollars with today’s $74.6 million negotiated sale that includes $26.7 million of senior-lien student revenue bonds and $47.9 million of tax maintenance notes.

“We think this is the right move at the right time,” said Arthur Tyler, deputy chancellor and chief operating officer of the college system, which serves portions of Harris and Fort Bend counties.

“Low interest rates mean a lower debt cost for the taxpayers,” Tyler said. “Like everybody else, our board is always looking for ways to maximize tax revenues.”

System trustees authorized the debt sale earlier this year and gave the administration the option of determining when the sale should occur.

“We think this is an ideal time, based on the market,” Tyler said. “We have good ratings on this debt, the trustees have reduced the property tax rate every year for the past five years, and we’re expanding like crazy.”

The tax maintenance notes are rated AA-plus by Standard & Poor’s and Aa1 by Moody’s Investors Service. The notes are supported by the system’s property tax revenues.

The underwriting team on the tax maintenance notes includes JPMorgan, Bank of America Merrill Lynch, Hutchinson, Shockley, Erley & Co., and Rice Financial Products Co.

The senior-lien student revenue bonds are rated Aa2 by Moody’s and AA-minus by Standard & Poor’s.

Loop Capital Markets and Hutchinson Shockley are co-managing underwriters for the $26.7 million of student revenue bonds.

The system’s co-bond counsels are ­Vinson & Elkins LLP and Bracewell & Giuliani LLP. RBC Capital Markets Corp. is the system’s financial adviser.

With the sale, the system will have $603.5 million of outstanding debt, including $224 million of revenue bonds, $182 million of general obligation bonds, and $123 million of lease revenue bonds issued by the Houston Community College System Public Facilities Corp. The college system established the public facilities corporation in 2005.

Tyler said the district would spend $52 million in bond proceeds and other revenue to build a new early-college high school and parking facility in the Alief area of southwest Houston. Voters in the Alief Independent School District voted to join the college system in November 2009.

The special high school will enable students to graduate with one year of college credit, Tyler said, with some students receiving a two-year associate’s degree along with their high school diploma.

“That is something we promised the voters in Alief that we would do, and we are doing it,” he said. 

The system serves 2.2 million people in Harris County, which includes Houston, and Fort Bend County.

Assessed values within the system boundaries have increased by 10.2% each year during the past five years to approximately $130.4 billion for fiscal 2010. However, preliminary assessed valuations are expected to drop to $125.9 billion in fiscal 2011.

The current property tax rate is 7.78 cents per $100 for operations and maintenance and 1.44 cents per $100 for debt service.

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