South San Francisco, CA May 23, 2016 Submitted by John Horgan, SSFUSD
Message from SSFUSD Superintendent Dr. Shawnterra Moore
To achieve the highest credit rating from Fitch and the second highest credit rating from Moody’s is not an easy task to accomplish for any public entity. Both major credit rating agencies examine the full financial and managerial aspects of a school district and go back at least ten years on all documents to determine the credit worthiness of a school district. If the bond rating is good, the entity is strong enough to pay its obligations, which include expenses, payments on debts, and dividends. If a bond rating agency gives the entity a high rating (or if it raises the rating), that’s a great sign for anyone holding the company’s debt or receiving dividends. Conversely, a lowered rating indicates the company’s financial health is deteriorating, while a bad bond rating means the company is having difficulty paying its obligations. The highest rating issued is AAA. The grades AAA, AA, and A are considered “investment grade” or of high quality. The interest rates on the sale of bonds will be much better with a higher rating, thus saving the District millions in future interest payments. A great example is when someone takes out a mortgage, they want the best credit rating possible to get the lowest interest rate possible. South San Francisco USD is in the top 5% of the over 1,080 school district in the state who have been able to secure such a high credit rating. The Board and the Superintendent have been very prudent in fiscal matters and the high credit rating reflects that commitment.
South San Francisco Unified School District Secures Highest Bond Credit Rating Assigned to California School Districts
May 19, 2016 –The South San Francisco Unified School District has secured a “AAA” credit rating on its upcoming General Obligation Bond sale, affirming the District’s sound financial management and strong community profile.
Fitch Rating assigned its ‘AAA’ General Obligation Bond rating to District, which represents the highest credit rating assigned by Fitch.
The District has also secured a bond credit rating of “Aa1” by Moody’s investor service. There are only nine school districts in the State of California with a higher rating. These extremely strong ratings put the District in the top 5% of all school districts State-wide with bond debt.
Assistant Superintendent Michael Krause stated, “The rating reflects the District’s Board and Superintendent Dr. Shawnterra Moore’s strong commitment to making responsible financial decisions.” He added, “We estimate that the ‘AAA’ rating by Fitch and the AA1 rating by Moody’s, combined, should translate to millions of dollars in taxpayer savings in the form of reduced interest costs on these bonds.”
The bond financing was authorized by the District board earlier in April. “We appreciate our community’s support and we are committed to being good stewards of taxpayer dollars”, said Board President Patrick Lucy.
The District anticipates pricing approximately $129 million in bonds in late May. Most of the bond proceeds will be used to repay existing bond anticipation notes (“BANs”). The BANs were used to finance multiple projects throughout the District. The bond financing will allow the District to lock in current interest rates, which remain at near historic lows.