The San Diego Community College District’s bond rating was upgraded to the highest level possible by Standard & Poor’s, officials said Thursday.
The upgrade from AA+ to AAA could potentially lead to big savings for taxpayers when it comes to financing construction at City College, Mesa College and Miramar College, according to the district.
This is the third bond-rating upgrade for the district since 2005. The ratings measure the credit worthiness of a corporate or government institution and are used by banks to assess the likelihood a debt will be repaid. The rating, therefore, can lead to lower interest rates.
“When bond ratings are high, everybody wins,” said district Chancellor Constance M. Carroll. “The district is able to sell its bonds quickly in order to fund the construction projects approved by the voters, and the taxpayers win when there are tax refunds during bond refinancing. And of course, the students win by having access to excellent new facilities and instructional equipment.”
S&P noted the district’s strong cash reserves and responsible funding of its pension obligations in making its decision. Cash reserves equal approximately 7 percent of the district’s general fund expenses, which exceeds state and district policy, according to the district.
Higher bond ratings have already saved taxpayers money. The college refunded — similar to refinanced — about $524 million in bonds in November, which resulted in an $80 million reduction of debt, according to the district.
—City News Service
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