Local Investors Can Consider LCUSD Bonds

Representatives for Stifel Financial Corp. have been spending time recently in La Cañada Flintridge — where 71% of voters supported La Cañada Unified School District’s Measure LCF general obligation bond on the ballot last November — informing community members that the bond offering is expected to be available in the first half of May.
Their message to local constituents has been: “Basically, as voters, you approved this measure, the first part of which is coming onto the market, so we wanted to reach out and make sure to keep you in the loop,” said Hovick Babajanian, an associate vice president for Stifel Nicolaus & Co.
Babajanian grew up nearby in La Crescenta and spoke of frequent visits to See’s Candies and Sport Chalet.
“I’m very familiar with the culture of the community, and I would say there’s a lot of pride in the community,” he said. “And when we saw the margin by which the ballot passed, we thought the community is really for this, they understand the positives behind it. So we felt they might want to participate.”
At their meeting last month, Governing Board members authorized the issuance of the first $30 million in Measure LCF bonds to fund capital improvements outlined in LCUSD’s Facilities Master Plan. That issuance went before the L.A. County Board of Supervisors on Tuesday, when it received approval that will permit the bonds to begin being sold on the open market.
The Stifel representatives said they are not concerned about finding enough investors to buy the bonds, but that they wanted to reach out to local residents to invite them to participate.
“With the reputation the school district has, I have no doubt the deal would get done in and of itself,” Babajanian said. “But we wanted the community to know about it, because if they want to participate, it’s a fantastic opportunity to do so.”
Last June, Stifle handled the refinancing of $6.56 million of outstanding debt for the district, which benefited from an upgrade by Moody’s Investor Service to Aa1 from Aa2.
This week, Moody’s also assigned an Aa1 rating to the current bonds, reflecting in part, the ratings agency said in a statement, “the district’s sizeable and growing tax base, strong socioeconomic profile and healthy financial positions supported by fiscal prudence, strong community support and stable enrollment.”
“From a district’s perspective, they care about having a good rating just as we care about having good credit,” said Adam Morgens, vice president for Stifel Nicolaus & Co.
In 2016, Stifel led the nation in K-12 financing with 409 issues totaling nearly $8 billion, according to data from Thomson Reuters SDC.
Measure LCF resulted from a Facilities Master Planning process that identified projects to upgrade and modernize classrooms and infrastructure at each of the LCUSD campuses.
The general obligation bond passed by voters extends local bond tax rates for about another 30 years without increases in tax rates beyond what was already paid, or about $60 per $100,000 of assessed value of taxable real property within the district. The estimated total debt, including principal and interest, is $268 million.
For more information, email adam.morgens@stifel.com or hovick.b@stifel.com.

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