Wall Street bond rating agency Standard & Poor’s (S&P) Global Ratings recently upgraded the Placentia-Yorba Linda Unified School District’s (PYLUSD) long-term and underlying credit rating (SPUR) to ‘AA’ from ‘AA-’ on existing General Obligation (GO) Bond debt. Concurrently, S&P Global Ratings upgraded the SPUR to ‘AA-’ from ‘A+’ on the district’s existing Certificates of Participation (COP).
“We are pleased about our credit increase as it reflects our district’s focus on carefully managing outstanding bond debt to ensure taxpayer dollars are optimized," shared Superintendent Dr. Alex Cherniss. “This has always been the Board’s direction to staff.”
S&P Global Ratings also assigned a stable outlook on the rating, indicating the district’s track record of strong financial management leading to the maintenance of available reserves comparable to regional and national peers. The upgrade also reflects the underlying strength of the local economy which has continued to trend positively with above-average measures of wealth and incomes, despite the large degree of uncertainty surrounding the pandemic in recent years.
“Our commitment to the community is that we will always work to maximize our fiscal and capital resources to support educational opportunities for our students,” noted Board President Shawn Youngblood.
This is not the first credit upgrade that the district has achieved in recent years. Two years ago, Wall Street bond rating agency Moody’s Investors Service assigned a positive outlook and upgraded the district’s high rating of Aa2 up from Aa3. Moody's also upgraded the district's issuer rating, general obligation, and COP ratings one notch to Aa3 from A1, Aa2 from Aa3, and A1 from A2, respectively.
Back in 2021, with interest rates at historically low levels, PYLUSD issued its 2021 Series A and B GO Refunding Bonds. Remarkably, this action saved local property taxpayers approximately $71.5 million over the bonds' life without extending the original bonds' term. The savings were generated by issuing refunding bonds at lower interest rates to repay the existing bonds, similar to refinancing a mortgage at a lower rate. The district also underwent a similar bond refinancing four years ago, which resulted in $7.2 million in savings for residents.