BHUSD Bonds Get Top Rating

Standard & Poor's has affirmed an "AA" credit rating status and stable outlook for general obligation bonds issued by the Beverly Hills Unified School District. That is welcome news as the district seeks bridge financing to start its bond sales.

"After an in-depth analysis of our budget through interaction with LACOE [Los Angeles County Office of Education], the assessor controller’s office and the district staff, the S&P has affirmed our bond rating of 'AA' with a stable outlook," Assistant Superintendent Alex Cherniss said in an email last week to Board of Education members.

In a May 11 letter addressed to Cherniss labeled as "regarding Beverly Hills Unified School District, California, General Obligation Bonds," S&P noted that it has "reviewed the rating on the above-referenced obligations. … We have affirmed the 'AA' rating and stable outlook."

According to the S&P website, an "AA" rating is the second-highest rating available.

"An obligor rated 'AA' has very strong capacity to meet its financial commitments. It differs from the highest-rated obligors only to a small degree," the description says.

The S&P letter comes a few months after Moody's Investor Service, a rival service to S&P, rating on BHUSD bonds. An "Aa1" rating is one step below Moody's top rating of "Aaa."

"The S&P affirmation, combined with our Moody's rating, is good news for the district and puts us in a good position with investors," Cherniss told Patch.

The BHUSD board last month approved a request to seek in bridge financing to fund the start of several Measure E-related projects. Bridge financing is a short-term loan used until permanent financing—in this instance new bond sales—is secured. The financing is needed because the $334 million in Measure E bond sales are staggered from 2009 to 2018.

The latest ratings should help the district obtain the lowest interest rate possible for the bridge financing. If the ratings remain unchanged, it should also help the next round of Measure E bond sales scheduled for 2012.

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