The nation’s two largest investment services have assigned AA credit ratings to Southwestern College. The ratings, released last week, are a critical factor in determining the district’s credit worthiness as it releases the final bonds authorized under Propositions R and Z.
S&P Global Ratings assigned its AA- long-term rating and Moody’s Investors Service assigned an Aa2 rating to the college.
“Maintaining our AA ratings demonstrates to investors that Southwestern College–and more importantly our students–is a worthwhile investment,” said Dr. Kelly Hall, the assistant superintendent/vice president for business and financial affairs. “Our governing board has kept their fiduciary responsibility to South County taxpayers at the forefront in helping us manage our construction program.”
The college expects to release to market the remaining $73.6 million bonds of Proposition R and the remaining $184 million bonds of Proposition Z during the week of Oct. 18.
In reaffirming the district’s credit ratings, the two firms considered the broad and diverse economy of southern San Diego County, with its extremely strong market value; Southwestern’s stable historic operating performance and strong reserve levels; and the experienced management team with good financial management practices and policies.
“Southwestern’s track record for completing projects within budget is the hallmark of a well-run construction program,” said Superintendent/President Dr. Mark Sanchez. “We are excited to begin work on the next group of projects that will improve our students’ academic lives. Additionally, ensuring we are excellent stewards of taxpayer dollars is a top commitment of the district.”
The proceeds of the bond sales will finance the acquisition, construction and improvements of various projects included in phase one of the Facilities Master Plan. The next projects in the pipeline include the new Student Union, Instructional Building One/University Center–both on the Chula Vista campus–and the Automotive Technology facility at the Higher Education Center at Otay Mesa.
Proposition R is the $389 million general obligation bond approved by voters in 2008. Proposition Z is the $400 million general obligation bond approved by voters in 2016.
Last year, the college refinanced $55 million of Proposition R bonds sold in 2008 for a lower interest rate, saving South County taxpayers more than $10 million over the next 20 years.