May 5, 2020 – Recently, Standard & Poor’s Global Ratings and Moody’s Investors Service both assigned their highest quality ratings, AAA Stable and Aaa Stable respectively, to Collin College’s Series 2020 Limited Tax Bonds.
The top ratings enabled the college to negotiate a favorable sale of its $350 million par 2020 Limited Tax Bonds with lead underwriter Siebert Williams Shank & Co., LLC. The college received an interest rate of 2.64 percent for the serial bonds with a maximum maturity of 20 years.
According to Collin College District President Dr. Neil Matkin, this marks the second bond issuance from the 2017 bond authorization.
“The college received exemplary credit ratings in both 2020 and 2018,” Matkin said. “These ratings demonstrate that Collin College continues to be a model, stable institution with excellent financial stewardship by our elected trustees. The ratings also led to the low interest rate on the 2020 bond series which will provide savings for our taxpayers.”
S&P Global Ratings top rating illustrates that the college’s capacity to meet financial commitments on the bonds is extremely strong. According to S&P Global Ratings the college district has “a stellar economy with very strong income and extremely strong market value per capita, coupled with very strong reserves.” The report also cites the college’s good financial management practices under the financial management assessment methodology and long-range planning.
The Aaa rating from Moody’s Investors Service indicates that Collin College is subject to the lowest level of credit risk. Moody’s Investors Service also cites the college’s “very large and rapidly growing tax base located within the economically vibrant Dallas/Fort Worth metropolitan area, with strong resident income and wealth levels, a very strong financial position, and low debt and pension liabilities” as the reasons for the top rating.
The 2020 Limited Tax Bond transaction included a premium over par of $49.4 million, which allows the college to issue par debt of $302.7 million, generate $350 million for construction, and pay the costs of issuance from the proceeds of the transaction.
The bonds are secured by the district’s direct and continuing ad valorem tax, within the limits prescribed by law, on all taxable property in the district. Proceeds from the bond issue will be used to reimburse the college for expenses incurred in several projects including Trane energy upgrades at all existing campuses and two centers and construction of the college’s Celina Campus, Farmersville Campus, Technical Campus, Wylie Campus, and the Information Technology (IT) Center at the Frisco Campus.
According to Dr. Bob Collins, founding member and current chair of the Board of Trustees, Collin College has always emphasized a conservative financial approach. “Over 35 years of operation, the college has worked hard to minimize debt while providing the lowest-cost, highest-quality educational opportunities for our citizens,” Collins said. He added, “Building four new campuses opening between Fall 2020 and Fall 2021 along with a new IT Center on our Frisco Campus will enable the college to continue to serve one of the fastest-growing areas in the nation.”
Dr. Matkin added that the college, even though currently offering classes and student services online due to the Coronavirus (COVID-19), is working to finalize plans to reopen responsibly. According to both credit rating agencies, the college is not vulnerable to immediate material credit risks related to the Coronavirus (COVID-19). The longer-term impact will depend on both the severity and duration of the crisis.
Collin College serves more than 59,000 credit and continuing education students annually and offers more than 100 degrees and certificates, including new Bachelor of Science in Nursing (BSN) and Bachelor of Applied Technology (BAT) in Cybersecurity degrees. The only public college based in Collin County, Collin College is a partner to business, government and industry, providing customized training and workforce development. In addition, the college operates the Collin Higher Education Center, which has an enrollment of more than 3,300 each year in partnership with The University of Texas at Dallas, Texas Woman’s University, Texas A&M University-Commerce, Texas Tech University and the University of North Texas. For more information, visit www.collin.edu.