Lone Star College System will issue the first portion of a $420 million authorization approved by voters in May with a negotiated sale of $150 million of limited-tax general obligation bonds.
The bond sale is the first one under the new name for the community college district that was established in 1973. The system expects to issue the remaining authorized bonds with three more sales by 2011. The debt will be issued as 30-year current interest bonds.
The sale, which is set for Aug. 6, follows an upgrade of its debt rating by Standard & Poor’s to AA-plus from AA.
“Proceeds from the bond sale will be used to build and expand facilities at each of the district’s current campuses and centers, and purchase land for future campus sites needed to meet the demand of the area’s rapidly growing population,” said Cynthia Gilliam, vice chancellor of business affairs and chief financial officer for LSCS.
The improved credit rating, which Standard & Poor’s analysts said was based on the district’s “ongoing trends of strong financial performance, low direct debt, and a growing tax base,” is significant, Gilliam said.
“We think it will save us at least $1.5 million in interest over the full $420 million authorization,” she said.
Gilliam said the system’s available classroom space has lagged behind the growth in population because of a rejected bond election in 2006. Because of the urgency of the situation, she said, work will begin on the projects almost immediately after the bonds have been sold.
“We’ve interviewed 27 architectural firms,” Gilliam said. “We told them we plan to sell the bonds on Aug. 6, the board will award the architectural work at its meeting on Aug. 7, and we expect them to begin work on Aug. 8. We want to get orders placed for steel, concrete, and other materials before the prices go up any more.”
Lone Star College System consists of five colleges, including LSC-CyFair, LSC-Kingwood, LSC-Montgomery, LSC-North Harris, and LSC-Tomball, six centers and LSC-University Center. With 49,250 students, it is the largest institution of higher education in the Houston area, and third largest community college district in Texas. To learn more, visit LoneStar.edu.
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