Published on: January 07, 2010
Lone Star College System continues to save millions of dollars for its taxpayers by receiving an AAA rating from Standard & Poor’s Ratings Service on its latest issue of notes.
The latest AAA bond rating by Standard & Poor’s, the highest rating possible, was given to the college system’s issue of $32.5 million in maintenance tax notes that will mature in 2028.
In addition, Moody’s Investor Services, a similar rating entity, earlier last year assigned an Aa2 rating to the college’s $150 million in general obligation bonds, along with an Aa3 rating to $35 million in outstanding revenue bonds.
Cindy Gilliam, LSCS vice chancellor for administration and finance and chief financial officer, noted that these excellent bond ratings will allow LSCS to obtain the lowest interest rates available, which in turns saves millions of dollars over the life of the bond.
“That savings is then used to pay down our debt earlier than scheduled, which allows us to continue to provide quality facilities to our students without an increase in the debt tax rate,” she said.
On May 10, 2008, LSCS voters passed a $420 million bond issue, and bonds are now being authorized by the LSCS Board of Trustees and issued for necessary and much-needed construction projects throughout the college system.
Standard & Poor's Ratings Services, a division of the McGraw-Hill Cos., is a nationally-recognized company that provides in-depth, third-party creditworthiness ratings of national and international companies and institutions – giving potential investors an understanding of the financial stability of the entity issuing the bond.
Moody’s Investor Services, a division of Moody’s Corp., is also a leading provider of credit ratings, research, and risk analysis. The firm's ratings and analysis track debt covering more than 110 sovereign nations, 13,000 corporate issuers, 26,000 public finance issuers, and 109,000 structured finance obligations.
LSCS received its first AAA rating by Standard & Poor’s in July and in November received the second AAA acknowledgement.
James Breeding, a credit analyst with Standard & Poor’s, indicated that the AAA rating is reflective of the college system’s “strong financial performance, low direct debt, and sizable and expanding tax base.”
“From our viewpoint, the AAA means the district has an extremely strong capacity to meet its financial obligations associated with the bonds,” Breeding said. “The rating also reflects the district's inclusion in the Houston area's economic base; stable enrollment trends; diverse revenue mix of state funding, local property taxes and student tuition; and significant revenue-raising flexibility.”
Lone Star College System consists of five colleges including LSC-CyFair, LSC-Kingwood, LSC-Montgomery, LSC-North Harris, and LSC-Tomball, six centers, LSC-University Park, LSC-University Center @ Montgomery, LSC-University Center @ University Park, Lone Star Corporate College, and LSC-Online. With more than 59,000 students in credit classes this past fall, LSCS is the second largest and the fastest-growing community college system in Texas and the largest institution of higher education in the Houston area. To learn more visit LoneStar.edu.