In June, RISD sold $125 million of unlimited tax school building bonds Series 2024. The issue was more than five times oversubscribed, which lowered the interest rate for almost every maturity of the Series 2024 bonds. The true interest cost was 4.0337% well below the 5.5% maximum approved by trustees in May. The sale is part of Bond 2021, and RISD has $25 million left to issue from that voter-approved bond package. Proceeds from this summer’s bond sale will fund HVAC, electrical, and plumbing renovations at RISD buildings; classroom equipment, including CTE, musical instruments and science equipment; furniture; technology network infrastructure; safety and security equipment; buses, and other vehicles.
Standard & Poor’s assigned its AA-plus rating to the issuance. This is the highest rating that S&P assigns to any Texas school district. Analysts said the strong rating reflects the RISD’s “maintenance of exceptionally strong general fund reserves, and good financial management, highlighted by regular reporting to the school board, informed budget decisions, with a target to maintain 25% in the general fund reserve and long-term planning.” S&P noted “operating pressures could result in a drawdown for fiscal 2025.”
Moody’s Investors Service assigned its gilt-edged Aaa rating, reflecting the district’s “sound financial operations that have yielded strong available fund balance levels that have exceed 40% of operating revenues in recent years.” Moody’s issued a stable outlook to RISD’s underlying rating due to analysts “expectation that the district will continue to exhibit strong fiscal management resulting in stable financial operations and that its debt burden will remain manageable despite future issuance plans.”
