SWS achieves historically low credit spreads attained for a Texas K-12 transaction
Siebert Williams Shank served as senior manager for Arlington Independent School District’s (“District”) Unlimited Tax School Building Bonds, Series 2021 issuance. The transaction marked the second issuance for the District’s $966 million bond election approved in 2019.
Proceeds from the sale of the Bonds for the Series 2021 issuance will be used for construction, acquisition, renovation and equipment of school buildings in the District, including the purchase of school buses. The Series 2021 Bonds are tax-exempt and structured as fixed-rate serial bonds maturing in years 2021- 2023, 2025- 2041 and a term bond in year 2046. The Bonds are optionally callable at par beginning on 2/15/2030. The District used a diversified mixed of coupons, with 4% coupons used after the call date.
During the order period, the SWS led syndicate generated an impressive influx of orders, with over $598 million institutional and retail orders resulting in oversubscription 3.8x of par amount.At the conclusion of the order period, the SWS-led syndicate had over 54 unique institutional investors, including a variety of SMA’s, Bond Funds, Prop/Trading, Bank Portfolios, Insurance Companies, Hedge Funds and even Municipal Government. 37 of the 54 institutional investors were non-current holders to the District’s debt, as of February 3, 2021, per Thomas Reuter’s eMAXX.
At reprice, SWS’ desk recommended lowering yields across select maturities ranging from 2 to 5 basis points. SWS’ premarketing efforts allowed the District to achieve historic low spreads, with spreads to MMD ranging from -1 to 9 bps for 5% coupons maturing 2021 – 2030 and 10 to 12 bps for 4% coupons bonds maturing 2031 to 2046. The All-In True Interest Cost (TIC) for the District’s bonds was 2.26%.