(Bloomberg) -- This week an exclusive Connecticut prep school is selling a small bond issue with a big story.

It’s about the growing demand for admission to elite institutions from parents striving to give what many view as the gateway to the good life for their children.

The Loomis Chaffee School was chartered in 1874 and has alumni including KKR & Co. co-founder Henry Kravis and George Shultz, secretary of state during the Reagan Administration. It’s seeking to raise $13.9 million in revenue bonds via the Connecticut Health and Educational Facilities Authority.

Applications for the private high school hit 2,456 for the 2023-2024 school year, an all-time high, while the acceptance rate fell to 17%, a record low, according to the bond offering documents.

About 15 years ago that acceptance rate was 45%.

“While the School has always been in demand, over the last five years the School has experienced increased interest and as such has been more selective in its admission process,” Loomis Chaffee said in the documents. 

The fierce competition for a limited number of seats typifies the experience of the handful of boarding and day schools that have tapped the municipal market in order to pay for campus improvements this year.

“This demand is really driven by affluent families across the United States, as well as a consistently growing pool of wealthy families in international markets such as Asia and South America,” said Patrick Ronk, an analyst at Moody’s Investors Service, which rates the Loomis Chaffee bonds A1. Such families “place a high importance on having their children receive an exclusive education and the social and professional network that comes with it.” 

Loomis Chaffee charges $68,420 for boarding and $52,100 for day students and enrolled 735 pupils for the 2023-24 school year. The school plans to use the financing to pay for a new dormitory and make campus improvements.

The increasing competition for spots at elite colleges only adds to the prep school draw as standardized tests are now often optional or not required, according to Justin Marlowe, research professor at the University of Chicago and director of the Center for Municipal Finance. 

“As admissions rates at selective colleges continue to decline, parents see prep schools like Loomis Chaffee as even more valuable,” he said in an email.

Loomis Chaffee has a 4:1 student-faculty ratio and average class size of 11 students, according to the documents, and “offers over 60 varsity, junior varsity and third-level teams across 32 different sports.” 

Such schools attract “robust levels of philanthropic support” to invest in their facilities, which are “far beyond like what most K-12 students across the country are able to access,” according to Moody’s Ronk.

A representative for Loomis Chaffee didn’t respond to a request for comment. 

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