San Dieguito High School District hires underwriters for next bond issue

At its Feb. 5 meeting, the San Dieguito Union High School District board appointed two firms for underwriting services for their Prop AA series B issuance.

Eric Dill, associate superintendent of business services, recommended that the district go with a negotiated sale, as it did with its first issuance, and use two underwriters rather than one.

With two underwriters, Dill said he thinks that opens the market to a wider scope of investors. With the negotiated sale, the board also has control over the date of sale and can be reactive to market conditions.

Dill said the district is also saving on underwriter costs by having an underwriting discount not to exceed .2 percent, rather than .6 percent. He said it would represent a savings of about $260,000.

The board approved hiring Stifel, Nicolaus & Company and J.P. Morgan Securities LLC. The hiring of Stifel, Nicolaus was not unanimous; the vote was 4-1 with John Salazar voting against it.

“You’ve certainly convinced me that a negotiated sale will be better,” Salazar said. “I think having two underwriters is a wonderful idea, but the other company invested in the bond campaign, so I’m stuck with not voting for (Stifel, Nicolaus & Company).”

At a board workshop on March 5, the board is scheduled to discuss the size and structure of the proposed bond series, go over a financial analysis of total costs and review projects that will be funded within the issuance.

The board is then slated to authorize issuing bonds at the March 19 meeting. The sale of the bonds is expected to occur in April.


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