Virginia launches disclosure initiative ahead of school deal
The Virginia Public School Authority will competitively issue $110 million of tax exempt school financing bonds on the heels of launching four new investor relations websites to increase transparency.
The 2018B VPSA limited obligation bonds price Tuesday on Ipreo’s BiDCOMP/PARITY System.
Proceeds will be used to purchase the obligations of local public schools that financed capital projects in Chesterfield, Frederick, Hanover, Mecklenburg, Roanoke, and Stafford counties, and the city of Harrisonburg.
The bonds are rated AA-plus by Fitch Ratings and S&P Global Ratings, and Aa1 by Moody's Investors Service. All have stable outlooks. Debt service payments are subject to appropriation by the General Assembly.
Davenport & Co. is the authority’s financial advisor. McGuireWoods LLP is bond counsel.
The VPSA deal is the first to come to market since the state undertook a new disclosure initiative to improve transparency, according to State Treasurer Manju Ganeriwala.
The agency has launched VirginiaBonds.com, VCBAbonds.com, VPBAbonds.com and VPSAbonds.com to provide investors with a free tool to obtain information on state bond programs using the BondLink internet disclosure platform.
“It was just fortunate that the sites became ready for launch at a time when the Virginia Public School Authority was preparing to sell bonds,” Ganeriwala said Monday. “We've been wanting to have the dedicated sites for our bond issuing authorities to provide consolidated bond-related information to investors and interested parties at one location.”
The Virginia Public School Authority was created in 1950 to provide financing to primary and secondary public schools in counties, cities and towns under a pooled bond program.
The authority last sold school financing bonds under the 1997 resolution in May. Citi was the successful bidder on the $63.9 million competitive deal with a true interest cost of 3.12%. The bonds priced to yield 1.78% with a 5% coupon in 2019, 2.66% with a 5% coupon in 2028, and 3.62% with a 3.5% coupon in 2038.
Some $3.8 billion of local school bonds were outstanding as of June 30, 2017.
The VPSA also issues notes to provide schools with financing and grants for technology and security programs. Some $199.9 million of notes are outstanding.