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Posted September 3, 2015

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Board Approves $70M Bond Sale

Excellent credit rating results in low interest rate for renovating schools.

The Board of Education on Wednesday approved the sale of $70 million in general obligation bonds that will be used to renovate and rebuild schools across the district.

“The district’s excellent credit rating was reaffirmed last week,” Acting Superintendent Raquel Reedy told the board during its regular meeting. “The sale was a very competitive process in a national market place with many participants.”

The overall interest rate for the bonds is 2.98 percent, only slightly higher than the rate from one year ago of 2.92 percent and an accurate reflection of current market conditions.

The low interest rate and competitive bids reflect the district’s very strong credit rating. Moody’s Investment Services rated APS at Aa1 as it has for the past five years; the AA rating APS received from Standard & Poor’s has been consistent for decades.

The strong rating, according to Moody’s, reflect the district’s large and diverse tax base, financial staff stability, adequate and improving financial position and manageable debt.

The excellent credit ratings translate into lower interest rates which allow APS to spend more money on modernizing classrooms, improving playgrounds, upgrading computer labs, renovating gyms and cafeterias, improving schoolyard lighting and fencing and more. The bonds were approved by voters in 2013.

Moody’s did change the APS outlook from stable to negative citing some uncertainties including the teacher workforce, employee pension obligations, senior administration turnover and charter school competition. The district sees these outlook shifts as cautionary and is working to address the concerns.