On the heels of its recent AAA credit rating from Fitch, the Peralta Community College District announced the successful sale of $157.8 million of general obligation bonds. The financing accomplished two goals for the District: Refinancing bonds previously issued by the District in 2007 and 2009; and producing $50 million for new and ongoing capital projects at the District’s four colleges – Berkeley City College, College of Alameda and Laney and Merritt Colleges in Oakland.
Peralta District Taxpayers will receive a significant savings benefit from the refinancing, totaling $24.7 million over the life of the bonds, through a reduction in their annual property tax assessments. The refinancing lowered total interest cost by a present value savings equal to 16.8% of the principal amount of the prior bonds. The refunding bonds carry a true interest cost of 2.9%, which is substantially lower than the 5.0% average interest rate of the prior bonds.
“We are pleased to be able to find ways to reduce the cost of our bonds that ultimately benefit our voters,” said Peralta Colleges Chancellor Jowel C. Laguerre, Ph.D. “We appreciate the work the bonds team has done to support our efforts on behalf of our citizens. We are grateful to our taxpayers for what they do to make Peralta a successful district in educating our citizens,” he added.
The 2016 general obligation bonds are rated “AAA” by Fitch Ratings and “Aa3” by Moody’s Investors Service.
Several firms comprised the District’s bond finance team. KNN Public Finance, LLC, served as Municipal Advisor for the transaction. Orrick, Herrington & Sutcliffe LLP served as Bond and Disclosure Counsel. The bonds were sold via negotiated sale, led by Citi as senior manager. RBC Capital Markets served as co-senior manager. Siebert Branford Shank and Backstrom McCarly Berry served as co-managers. Peralta’s Vice Chancellor for Finance and Administration, Ron Little, led the District’s efforts.
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