The school district of Little Rock, Arkansas, sold $101.9 million in bonds to finance capital improvements to its facilities.
The bonds mature between 2025 and 2052, yielding between 3.11% and 4.32%. They received a rating of Aa2 from Moody’s Investors Service.
Moody’s analysts wrote that their rating is based on aid provided by the state of Arkansas to the district. The rating “also reflects the strong sufficiency of available revenues and transaction structure of this financing,” they added.
The district will use the bond proceeds to upgrade public schools. Last December, the school district’s board voted to approve a plan to build a new high school. It estimates that construction will cost at least $145 million. The board also signed off on millions of dollars in additional improvements, including for athletic facilities at a district elementary and middle school.
Financing these improvements has been contentious. Declining enrollment and higher-than-expected construction costs have led some board members to call for budget cuts, which the school district is expected to enact next year by adjusting its personnel. Not all members of the district board agree with those cuts; the vote to approve construction of the new high school—the cost of which is almost double a 2021 estimate—passed 7–2.
The bonds are limited, general obligations of the school district, secured by a debt service tax that Little Rock voters approved in 2021.
Wells Fargo Bank, NA, served as underwriter on the issuance, purchasing the bonds for $100.5 million. The price reflected a discount of $1.4 million. Stephens Inc acted as municipal advisor.