SWS generated $556.9 million in priority orders from 36 institutional investors

The Series 2020 Bonds were issued to finance a portion of the costs relating to the replacement and realignment of the existing Frederick Douglass Memorial Bridge over the Anacostia River and to build new interchanges with the bridge. Given the District’s strong coverage and credit profile, the Series 2020 Bonds were issued without a debt service reserve fund.

In the week leading up to pricing, the municipal and Treasury markets experienced significant volatility following a flight-to-quality in response to concerns over the coronavirus outbreak in China and MMD tightened by 2-10 bps from the prior week. Overall tax-exempt and taxable supply was light and there were significant inflows from muni bond funds.

Given the FOMC meeting on Wednesday, January 29th, SWS recommended pre-marketing the transaction on Monday, January 27th and pricing on Tuesday morning (January 28th). SWS developed a slides-only investor presentation which was viewed by 25 different investors, 24% of which ultimately submitted orders. Given the feedback gathered by SWS during the pre-marketing period and even with a rally in the Treasury market, SWS recommended entering the market with the same spreads in order to build an order book.

Despite the volatile market, SWS generated $556.9 million in priority orders from 36 institutional investors, 34 of which are not previous reported holders of the District’s GARVEE bonds. At the end of the order period, SWS offered to tighten spreads by 1 to 4 basis points across the curve, which was aggressive based on the subscription levels of each maturity that was re-priced (1.5x-3.6x). The District was able to achieve a low all-in TIC of 1.97% on the transaction (average life of 10.1 years).