A bond is a loan an investor makes to the college district. To issue bonds for its capital projects, the district must demonstrate how reliable a borrower it will be.
An initial step in the financing plan was for rating services such as Standard and Poors Corporation and Moody's Investor Services to evaluate the district's credit-worthiness and financial health. From these assessments, an insured AAA rating was assigned to the bonds to which a low interest rate was pegged, thus saving public funds as the loan is repaid.
With considerable advanced planning, the college district was poised to quickly begin projects once Measure E was approved. After the initial offering which yielded $96.1 million, the district will issue bonds in two more phases, the last issuance in 2009.
Bonds have a 30-year maturity, the date upon which the college district pays back the face value of the bond. Sold in $5,000 increments, the district’s bonds may be purchased through local investment brokers.
General Obligation Bond