Friday , 18 August 2017

FRISCO ISD RECEIVES SECOND HIGHEST BOND RATINGS

frisco_isdTwo national independent credit rating agencies recently praised Frisco ISD for a history of sound financial practices and prudent management of rapid enrollment growth.

Moody’s Investors Service assigned a Aa1 underlying rating and Aaa enhanced rating to the District’s $95 million Unlimited Tax School Building Bonds, Series 2013, and affirmed a Aa1 rating on existing debt.

Standard & Poor’s Ratings Services assigned a AA+ school issuer credit rating and AAA long term rating, with the same ratings given on existing debt.

These are the second highest and highest ratings each agency awards.

Of the Texas school districts that have a Moody’s rating, 2 percent have a higher credit quality rating than FISD, 3 percent have the same rating and 95 percent have a lower rating.

Of the Texas school districts that have a Standard & Poor’s rating, none have a higher credit quality rating than FISD. Three percent have the same rating and 97 percent have a lower rating.

The high ratings enable the District to get the best market price available at the time of a bond sale, in much the same way a higher credit rating or FICO score benefits individuals.

Standard & Poor’s praised the District’s general creditworthiness, including its:

  • ·         Participation in the Dallas-Fort Worth Metroplex’s deep economy;
  • ·         Very strong wealth and income;
  • ·         Rapid economic growth, resulting in increasing property values and enrollment;
  • ·         Very strong finances;
  • ·         Good financial management policies.

Moody’s also cited a large and diverse tax base, in addition to conservative budgeting.

“The district has an adopted fund balance policy that guides district general fund reserves to no less than 15% of annual expenses,” Moody’s wrote. “The district has consistently managed their financial operations to remain within this policy despite rapid enrollment growth and state funding reductions.”

In addition to the bond ratings, the agencies assigned a stable rating outlook for FISD’s November 5 sale of the 2013 series bonds. The series is part of the $798 million bond package approved by voters in 2006 to take the District to 52,000 students.

“The outlook reflects the district’s sizable and growing tax base and enrollment, healthy financial operations and high yet steady debt burdens,” Moody’s wrote.

Frisco ISD has maintained the Aa1 and AA+ underlying ratings since July 2010.

The enhanced ratings of Aaa and AAA reflect the Texas Permanent School Fund (PSF), which guarantees principal and interest repayment for school districts state-wide.

The District’s ability to maintain very high underlying credit ratings during a period of significant growth and uncertain economic conditions has made Frisco ISD bond issues very sought after in the investment community.

Story submitted by Meghan Youker

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