The San Francisco Community College District issued $270 million in bonds to finance improvements to the City College of San Francisco (CCSF) and other district facilities.
The bonds mature between 2025 and 2409, yielding between 3.22% and 4.15%. They received an insured rating of AA from S&P Global Ratings, and an underlying rating of A+ from S&P and A1 from Moody’s Investors Service.
“The A1 rating reflects the district’s exceptionally large and growing tax base, which is coterminous with the City and County of San Francisco (Aaa stable), and improved financial performance, supported by state aid that has held the district harmless for ongoing enrollment losses and federal and state funding to offset costs associated with the pandemic,” Moody’s analysts wrote.
The issuance comes amid falling enrollment and increasing expenditures for the district. The district expects that its general fund reserve will shrink from 9.3% of revenues during fiscal year 2022-23 to 5.4% in FY 2024-25, according to the official statement accompanying the sale of the bonds.
The community college district operates CCSF and five other education centers. The bonds are general obligations of the district, payable by property taxes.
Morgan Stanley & Co LLC served as lead underwriter on the issuance, purchasing the bonds for $291.2 million. The price reflected a premium of more than $21 million. KNN Public Finance LLC acted as municipal advisor.