The Sequence of Decisions Facing School District Officials in the Bond Issuing Process: A Multistage Model.

district officials facing the need to finance extensive capital expenditures must analyze all potential sources of funding. This paper focuses on the dominant local funding mechanism the school district bond issue. The model has three separate stages to represent the sequence of outcomes facing a school official throughout the bond issuing process. The choices are whether to have a bond rated (first stage) and whether to insure the bond (second stage). The third stage estimates the actual rating that a bond receives. The results indicate that it is mainly the par value (size) of the bond issue, and not the credit quality, that is the decisive factor in the decision of whether or not to have a bond rated. However, the findings for the final two stages of the model suggest that a variety of economic, demographic and financial characteristics of their districts influence the decision of school officials about whether or not to purchase insurance and the investment rating that agencies assign to an issue.The Sequence of Decisions Facing School District Officials in the Bond Issuing Process: A Multistage Model