The district maintained its AA1 stable rating, one level below the top AAA rating, from the Moody’s Investor Service. Moody’s cited a favorable improvement in the district’s financial condition in awarding the rating.
“These ratings demonstrate that the San Diego Community College District provides an excellent education paired with strong student supports through responsible and effective management of its finances and operations,” said Chancellor Gregory Smith.
Bond ratings measure the credit worthiness of a corporate or government institution and are used by investment professionals to assess the likelihood a debt will be repaid. Ratings are assessed on a variety of factors, including the health of an organization’s balance sheet, its debt, and its cash position.
In raising the district’s bond rating, Standard & Poor’s cited SDCCD’s steady financial profile, balanced operations, and financial resources that are supported by favorable enrollment trends.
“The rating reflects our view of San Diego CCD’s extremely strong enterprise risk profile and strong financial profile,” the rating agency said.
The bond rating is for the district’s two voter-approved bonds: Proposition S, a $685 million bond approved by voters in 2002; and Proposition N, an $870 million bond approved in 2006. Funding from the bonds is being spent on construction and renovations of facility projects at the district’s four colleges: San Diego City College, San Diego Mesa College, San Diego Miramar College, and San Diego College of Continuing Education.
The district’s previous bond ratings have enabled it to save taxpayers money as the district issues refunded – which is similar to refinanced – Proposition S and N general obligation bonds through lower interest rates or other improved market conditions over the life of the outstanding debt on the bonds.