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Fitch, S&P Give Cerritos College Bonds High Ratings
Voters Approve Cerritos College G.O. Bond Measure
College Board Votes to Place Bond Measure on March Ballot
Fitch, S&P give Cerritos College Bonds High Ratings
First $40 Million Sale of Bonds Issued this Week
For Immediate Release: July 1, 2004
Media Contact: Kristen Habbestad,
NORWALK, CA – July 1, 2004 – Cerritos College Community College District has announced that rating firms Fitch Ratings and Standard & Poor’s (S&P) have assigned the college’s general obligation bonds ‘AA’ and ‘AA-‘ ratings, respectively, for its initial sale of $39,525,000 which opened June 30. The $210 million G.O. bond, known as ‘Measure CC’ was approved by voters during the March 2, 2004 election.
According to a statement by Fitch, the AA rating “reflects the district’s strong, underlying tax base and economy, low debt burden and solid financial position…the district’s financial position is healthy characterized by a prudent, tenured management team and high reserve levels.”
S&P's rationale for assigning the AA- rating reflects “participation in the very large, deep and diverse Los Angeles County economy,” a diverse tax base, a good financial base and low debt burden.
Fitch and S&P have assigned the bonds insured ratings of ‘AAA’ and ‘AAA,’ respectively, based on the issuance by Municipal Bond Insurance Association (MBIA) of its municipal bond insurance policy.
Both firms employ an 11-tier rating system—AAA is the highest—with pluses and minuses within that for smaller variations. Credit ratings are used by investors as indications of the likelihood of repayment in accordance with the terms on which they invested.
“Most California school and college districts have bond ratings between A and AA-,” explained Dennis Chuning, vice president of business services at Cerritos College. “We’re glad to have met our goal of obtaining a rating within the higher tiers.”
Cerritos College’s ratings were based on many factors, such as the college’s credit rating and debt ratio. Other elements that weigh into the rating include variables outside the college’s control, such as the state and national economy.
“We’re tremendously pleased that the college will be able to move forward with sales of highly rated bonds,” said Cerritos College Interim President John Grindel. “Now that we’ve opened our first sale, we look forward to beginning work on our bond-funded projects on campus.”
The college will sell portions of the $210 million authorized bond every two years—approximately $40 million per sale—working on projects with cash generated by each sale.
Cerritos’ G.O. bond projects will be overseen by a required Citizens’ Bond Oversight Committee comprised of local citizens and students at the college.
For nearly 50 years, Cerritos College has served as a comprehensive community college for southeastern Los Angeles County communities including Artesia, Bellflower, Cerritos, Downey, Hawaiian Gardens, Lakewood, La Mirada and Norwalk. The college offers degrees and certificates in more than 180 areas of study in nine divisions. Annually, more than 1,200 students successfully complete their course of studies, and enrollment currently surpasses 24,000 students. Visit Cerritos College online at www.cerritos.edu.
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KH