(May 10, 2010) – Lone Star College System has again received a rating of AAA – the highest rating possible – by Standard & Poor’s Ratings Service on the college system’s latest issue of $120 million in general obligation bonds.
In addition, S&P also affirmed the AAA rating on outstanding bonds that were previously issued.
“This AAA rating by Standard & Poor’s on this issue of bonds alone will equate to more than $2 million in savings for Lone Star College taxpayers,” said Cindy Gilliam, LSCS vice chancellor for administration and finance and chief financial officer.
According to S&P, the AAA rating reflects the strong financial performance trends of LSCS along with other potent financial features unique to LSCS that include: Inclusion in the deep and broad Houston metropolitan statistical area, coupled with its own sizable and expanding tax base; stable enrollment trends; diverse revenue mix of state funding, local property taxes, and student tuition; a significant amount of revenue-raising flexibility that offsets any potential pressure from enrollment-driven capital needs; and low direct debt burden.
According to the S&P report, the evaluation also embodies “Standard & Poor’s expectation that the district will sustain its sound financial position and maintain its current management practices while meeting growing enrollment-driven service demands.”
In May 2008, LSCS voters passed a $420 million bond issue, and bonds are being authorized by the LSCS Board of Trustees and issued for necessary and much-needed construction projects throughout the college system, along with refunding a portion of outstanding debt.
“When we are able maintain and receive this highest rating, the savings come through our ability to obtain the lowest interest rates possible,” said Gilliam.
The savings realized is then used to pay down debt earlier than scheduled, which allows LSCS to continue to provide quality facilities to its students without an increase in the debt tax rate, Gilliam said.
LSCS received two AAA rating acknowledgements by S&P last year and another AAA bond rating in January.
Standard & Poor's Ratings Services, a division of the McGraw-Hill Cos., is a nationally-recognized company that provides in-depth, third-party creditworthiness ratings of national and international companies and institutions – giving potential investors an understanding of the financial stability of the entity issuing the bond.
With more than 62,000 students in credit classes in spring 2010, and a total enrollment of nearly 85,000, Lone Star College System is the largest institution of higher education in the Houston area, and the second largest and the fastest-growing community college system in Texas. LSCS consists of five colleges including LSC-CyFair, LSC-Kingwood, LSC-Montgomery, LSC-North Harris, and LSC-Tomball, six centers, LSC-University Park, LSC-University Center at Montgomery, LSC-University Center at University Park, Lone Star Corporate College, and LSC-Online. To learn more visit LoneStar.edu.
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