In recent news, Prince George’s County Public Schools has announced a groundbreaking initiative to bring in over $660 million of taxable sustainable revenue bonds. These bonds are set to fast-track the construction of eight new schools through a public-private partnership, entering a market where taxable paper is in high demand. This innovative approach is expected to benefit both the community and investors alike.
Leading the project are Wells Fargo and TD Securities, serving as the primary underwriters, with Squire Patton Boggs acting as the bond counsel. The deal, valued at over $660 million, is set to be priced through the Maryland Economic Development Corp. with Progressive Education Partners (PEP) as the borrower. It is noteworthy that this project marks the first time Prince George’s County Public Schools has utilized taxable municipal bonds for such an endeavor.
PEP, in collaboration with Plenary Americas, will oversee the design, construction, financing, operation, and maintenance of the eight new schools. The project is scheduled to run until June 30, 2056, with a design-build phase expected to last 47 months. The construction of these schools is anticipated to bring about positive changes in the communities where they will be located, benefiting both the faculty and staff, as well as the surrounding neighborhoods.
The Series 2024 Bonds will fund a portion of the design and construction costs, as well as cover interest and issuing expenses. Structured to mature serially from November 2029 to 2039, with the largest tranche maturing in 2056, this deal offers an optional make-whole call. Despite fluctuations in the taxable municipal market, the project has garnered interest from investors such as international buyers and life insurance companies. This shortage of taxable supply in recent years, coupled with the project’s positive impact, is expected to drive investor enthusiasm.
The construction of eight new schools totaling over 1 million square feet will provide enrollment capacity for approximately 8,150 students. These new facilities aim to replace 14 outdated schools, improving the overall quality of education for students in the county. The project has been approved by the Prince George’s County Council and is set to bring substantial benefits to the community. It is worth noting that the developer must adhere to specific environmental standards, including achieving a LEED silver designation, ensuring sustainable practices are maintained throughout the project.
Moody’s has rated the deal A3 with a stable outlook, reflecting a positive financial outlook for the project. The bonds have been designated as sustainable by BTY US LLC in accordance with Green Bond and Social Bond Principals, highlighting the project’s commitment to environmental and social responsibility. The high midrange level of budgetary flexibility and strong reserve expectations add further credibility to the project’s financial standing.
The initiative to bring sustainable revenue bonds to Prince George’s County Public Schools represents a significant step towards improving educational infrastructure and fostering community development. The project stands as an example of successful collaboration between public and private entities to achieve a common goal of providing quality education to students while promoting sustainability and responsible financial practices.