Bonds Sell Quickly Thanks to Highest Rating From Credit Rating Agencies
The West Valley-Mission Community College District last week
sold $150 million in bonds, attracting the interest of several major investors
thanks to having recently earned the highest bond rating possible from Standard
& Poor’s and Moody’s.
The bonds sold in a matter of hours and included such institutional
investors as JP Morgan Bank, State Farm Insurance, Hartford Life Insurance,
Northern Trust Company, and Trainer Wortham & Co. Additionally, at the
local level, individuals from Saratoga bought $500,000 in bonds and individuals
from Cupertino purchased $20,000, said Ed Maduli, WVMCCD vice chancellor of
“We were very pleased with the strong response from the
financial community to our bond sale,” Maduli said. “The bonds attracted a lot
of interest, which is what we wanted. Because of the high quality of the bonds
and the good perception investors have of the district, we were able to sell
all the bonds very quickly. Such a response demonstrates the strength of our
In assigning the college district the AAA rating, the credit
rating agencies cited several factors for the increase from the rating of AA,
which is two levels below the highest rating. Standard & Poor’s, for
example, stated that the rating reflects the district’s recently achieved
basic-aid status, participation in the deep and diverse economy of Silicon
Valley and the greater San Francisco Bay Area, very strong available general
fund balance, financial flexibility provided by operating reserves held outside
the general fund and good financial policies and practices.
The bonds the district sold last week are part of the money
approved through Measure C, the $350 million bond measure voters overwhelmingly
approved in 2012.
Of the $150 million sold, roughly $78 million will go toward
the Main Building Replacement Phase II at Mission College. Construction on this
new building is set to begin in September. After that is built, the original
Main Building will be demolished and a technology building will be constructed
at the site. Both of those projects also are funded through this recent bond
At West Valley College, money from the recent bond sale will
pay for construction of the new Student Services Center as well as renovation
of the Business Division and Administration of Justice building, and renovation
of the Learning Resource Center.
The money also will pay for the construction of a new
Facilities Building for the district. All of the projects funded through the
recent bond sale are set to be completed over the next four years.
In conjunction with the sale of the Measure C bonds, the
college district also refunded, or refinanced, at a lower interest rate, about
$32 million in bonds that had been issued previously as part of Measure H, the
bond measure approved in 2004. The refinancing of those bonds resulted in about
$6.6 million worth of savings to taxpayers, Maduli said.
WVMCCD is just one of two community college districts in
California to earn the AAA bond rating from the two credit-rating agencies. Of
the 72 community college districts in California, the San Mateo County
Community College District is the only other district to earn the highest