Philadelphia Schools Lure Buyers as Budget Erodes: Muni Credit
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Philadelphia’s school district, the nation’s eighth-largest, is in such desperate shape that it plans to sell $300 million of bonds this week to plug a deficit. Yet investors hungry for yield have fueled a rally in its debt.
The district of about 203,000 students faces a $1.35 billion shortfall over the next five years and may close a quarter of its schools. It is resorting to deficit financing for the first time since 2002. And as in most of the U.S., public schools in the nation’s fifth-largest city are receiving less state funding per student than in 2008, according to the Center on Budget & Policy Priorities in Washington.