BAN issuance keeps LAUSD construction projects on time and on budget
Los Alamitos Unified School District took advantage of historic low interest rates to complete the sale of $18.7 million in Bond Anticipation Notes (BAN) this week. Pre-marketing the notes allowed LAUSD to actually lower the interest rate in the second sales period for a total interest rate of 2.80%.
Utilizing the sale of BANs, Los Alamitos USD is able to access school facility modernization funds now, rather than 2016, while taking advantage of favorable interest rates. These funds were authorized by voters with the 2008 passage of Measure K. The BANs will be repaid with the scheduled sale of general obligation bonds in 2016. The estimated five-year tax base increase is expected to allow the District to issue the repayment bond without impacting the tax rate approved by voters in Measure K.
Los Alamitos USD’s national reputation and favorable credit rating, led to the successful sale. Credit rating industry leader, Moody’s Investors Service, rated the BANs at Aa2. Standard & Poor’s rated the short term offering at SP1+. Other factors considered in the favorable ratings included the District’s financial strength, a stable local economy, sustained property values, and the high quality of education provided by the District.
Currently, modernization projects are underway at McAuliffe Middle School, Los Alamitos Elementary School, Hopkinson Elementary School, and Rossmoor Elementary School. Modernization will begin soon at Lee Elementary School and the gymnasium at Los Alamitos High School. Modernization has been completed at McGaugh Elementary School.
“We are pleased that the Los Alamitos Unified School District remains so well respected among investors,” commented Patricia Meyer, LAUSD Deputy Superintendent. “This is an exciting time for the District. I want to commend our students and teachers for their patience while their campuses are under construction. I know they are excited to move into their 21st century classrooms when construction is complete.”
“Despite a turbulent bond market, this week’s BAN issuance is proof Los Alamitos Unified continues to be an attractive investment,” commented Lynn Paquin, Executive Vice President of George K. Baum & Company, a privately-owned investment bank which handled the transaction for the District.
Los Alamitos Deputy Superintendent Patricia Meyer.
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