The San Dieguito Union High School District plans to issue its second Prop AA bond draw, a total of $125 million, in spring 2015. At its Dec. 11 meeting, the board discussed the type of bond sale and whether or not to engage one or more underwriters in advance of the sale.
The board discussed whether to have a negotiated or competitive sale.
A competitive sale is when an underwriter is not selected in advance and is awarded the bonds through a bid process on the day of sale, explained Eric Dill, associate superintendent of business services.
A negotiated sale is when an underwriter is selected before the day of the bond sale and is active in structuring the bonds and reviewing all the legal and financing documents. This type of sale also gives flexibility in the sale date, allowing a “fall back” option if the conditions are not favorable on the sale day. The district had success issuing the first series of bonds via a negotiated sale in 2013.
The board seemed to lean toward the negotiated sale and gave the nod to the district staff to put out a request for proposals for underwriters.
At its January meeting, the board plans to look at the numbers of what a potential sale could look like and what estimated payback ratios would be.