March 10, 2017CONTACT: Yancy Hawkins

Assistant Superintendent

Business & Operations

415 493-4260

Moody’s Upgrades NUSD’s Bond Rating

Novato, CA…Moody's Investors Service has upgraded Novato Unified School District’s generalobligation (GO) bond rating to Aa1 from Aa2. Concurrently, Moody's has assigned an Aa1rating to the district's $51 million General Obligation Bonds, 2016 Election, 2017 Series Aand A-1. In addition, Standard & Poor’s has affirmed their AA rating for Novato Unified. These strong bond ratingsenable the district to sell bonds at a lower interest rate thus saving taxpayer money.

The upgrade to Aa1 reflects multi-year incremental growth in the district’s tax base and

economy to levels consistent with the higher rating level. Additionally, the upgrade reflects the repeated voter approval of parcel taxes and revenuegrowth under the Local Control Funding Formula.

The Aa1 rating also reflects the district’s large tax base that benefits from its location in thevibrant San Francisco Bay Area and is experiencing healthy local economic trends. The ratingfurther reflects very strong resident wealth measures, a solid financial position supportedby conservative budgeting practices and policies, and moderately low and manageable debtand pension liabilities. The rating also accounts for the strength of the GO unlimited taxpledge, secured by ad valorem property taxes for debt service that are levied, collected, anddisbursed by the county outside the district’s operations.

NUSD’s credit strengths include:

  • Very strong socioeconomic profile
  • Large tax base benefiting from its Bay Area location and healthy growth
  • Conservative budgeting, strong financial policies, and a local parcel tax
  • Positive revenue trends with steady enrollment supported by inter-district transfers

On November 8, 2016, the district passed Measure G approving the sale of $222 million in general obligation bonds. In accordance with its Facility Master Plan, the district is planning for the issuance and sale of the first $51 million of bonds, which will be offered in two separate series. Series A will be traditional long term bonds in the amount of $47 million, and Series A-1 will be short term (3-year) bonds to provide funding for technology in the amount of $4 million.

The bonds will be sold via competitive sale on March 16, 2017. The two series will be sold separately. The bonds will be awarded to the proposer(s) offering the lowest interest rate.The bond closing is anticipated to occur on March 30, 2017.

Proceeds from the sale from the Bonds will be deposited into various funds held by the County in the County Investment Pool and will be withdrawn as needed for construction expenses. Costs of issuance of these bonds is estimated to be $190,000 and will be paid as part of the closing process.

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