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Lone Star College awarded AAA rating from Standard & Poor’s

Lone Star College has again received a rating of AAA – the highest rating possible – from Standard & Poor’s Ratings Service.

The AAA rating, which was issued for LSC series 2017A limited-tax general obligation bonds, allows LSC to save millions of dollars for its taxpayers.

“While Lone Star College is focused on student success, our highest operational priority is our financial health,” said Stephen C. Head, Ph.D., LSC chancellor. “As a taxpayer, I also want to make sure Lone Star College is spending money effectively and efficiently to meet our community needs.”

In its report, S&P noted “the system's financial performance is strong, in our view, with a history of operating surpluses on a full-accrual basis. We consider the system's financial management practices strong under our Financial Management Assessment methodology, indicating practices are strong, well-embedded and likely sustainable.”

“When we are able maintain and receive this highest rating, the savings are seen through our ability to get the lowest interest rates possible,” said Head.

The S&P report also cited “key budgeting practices include management's use of three-to-five years of historical information to form its revenue and expenditure assumptions.”

“This AAA rating confirms that the Lone Star College administration and board of trustees are being fiscally responsible and are working together to make decisions based on the best data possible,” said Dr. Alton Smith, LSC board chair.

LSC voters passed a $485 million bond referendum in November 2014 which is being used to create more learning space to accommodate the extraordinary growth being experienced in the LSC service area. The bonds are authorized by the LSC Board of Trustees and issued for necessary and much-needed construction projects throughout the college system, along with refunding a portion of outstanding debt.

“The savings realized is then used to pay down debt earlier than scheduled, which allows LSC to continue to provide quality facilities to its students without an increase in the debt tax rate,” said Smith.

The S&P report concluded that “the stable outlook reflects our expectation that the service area's strong economy, which centers on the rapidly growing and diverse Houston-The Woodlands-Sugar Land MSA, will continue to allow for ongoing tax revenue and enrollment growth. It also reflects our expectation that the system's strong financial management and good budgetary flexibility should allow it to at least maintain its strong financial profile.”

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.

Lone Star College offers high-quality, low-cost academic transfer and career training education to 98,000 students each semester. LSC is training tomorrow’s workforce today and redefining the community college experience to support student success. Stephen C. Head, Ph.D., serves as chancellor of LSC, the largest institution of higher education in the Houston area with an annual economic impact of $3.1 billion. LSC consists of six colleges, eight centers, two university centers, Lone Star Corporate College and LSC-Online. To learn more, visit LoneStar.edu.

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