March 21, 2018- Collin College found a favorable market for the competitive sale of its $234.25 million par 2018 Limited Tax Bonds recently, marking the first bond issuance from the 2017 bond authorization. The 2018 Limited Tax Bonds will provide funds for expenses incurred in constructing the college’s Public Safety Training Center as well as beginning construction on two new campuses—the Technical Campus and the Wylie Campus.
Collin College District President Dr. Neil Matkin attributes the low interest rate, 3.29% including costs of issuance for the serial bonds with a maximum maturity of 20 years, to the recent highest quality ratings from Standard & Poor’s Global Ratings and Moody’s Investors Service.
“Collin College is one of only three community colleges in the state of Texas that has a AAA rating for bonds,” Matkin said. “The top rating opened the door for favorable market bids, and we are pleased to pass down the interest savings to our taxpayers.”
According to Kenneth D. Lynn, Collin College chief financial officer, the AAA rating attracted bids from some of the largest Wall Street firms and syndicates, attesting to the institutional investment quality of the bonds. The winning bid price, submitted by Bank of America Merrill Lynch, included a premium over par of $16.3 million which allows the college to issue par debt of $234.25 million, generate $250 million for construction, and pay the costs of issuance from the proceeds of the transaction.
In addition to obtaining an extremely favorable interest rate, the college also created unique structured repayment terms. Special call features on bonds maturing in 2035-2038 will give the college an opportunity to pay off long-term debt that carries the highest interest rates as early as 2022 and save significant interest costs for taxpayers.
“The bonds maturing in 2027-2034 have a nine-year call feature and are callable after August 15, 2027, should the college find a favorable economic opportunity,” Lynn said. “The college is positioned to repay the debt in a manner that will lower our borrowing costs and responsibly exercise our stewardship of taxpayer resources in providing quality academic and workforce training to Collin County.”
Collin College serves more than 53,000 credit and continuing education students annually and offers more than 100 degrees and certificates. The only public college in the county, Collin College is a partner to business, government and industry, providing customized training and work force development. In addition, the college operates the Collin Higher Education Center, which serves 3,200 additional students each year in partnership with The University of Texas at Dallas, Texas Woman’s University, Texas A&M Commerce, Texas Tech and the University of North Texas.