This remarketing transaction consisted of two subseries of tax-exempt variable rate bonds, with rates being reset on a weekly basis. Both Subseries 2005B-2a and Subseries 2005B-2b had par amounts of $93,600,000.
Siebert set the initial interest rate on both Subseries at 0.10% (+5 bps to SIFMA). This initial interest rate will be in effect from the delivery date through Wednesday January 27, 2021 for the Subseries 2005B-2a Bonds and through Thursday January 28, 2021 for the Subseries 200B-2b Bonds with subsequent rates set weekly on the Clarity BidRate Alternative Trading System Platform (“Clarity”).
Clarity is an open and transparent internet-based bidding platform available to all professional investors on which an issuer’s weekly VRDB interest rate is determined by an electronic bidding process conducted directly between investors.
The weekly interest rate on the Series 2005B-2a Bonds will be determined on the Clarity System on Tuesday of each week, commencing Tuesday January 26, 2021. The weekly interest rate on the Series 2005B-2b Bonds will be determined on the Clarity System on Wednesday of each week, commencing Wednesday January 27, 2021.
The Pricing of the Subseries 2005B-2 Bonds occurred on the morning of the Inauguration of President Joe Biden. The market opened very stable, with MMD and Treasuries remaining unchanged by the end of the day. The week’s anticipated supply was light and manageable, with a $4.8 billion tax-exempt primary calendar.
Investors placed a total of $617.2 million in orders, leading to an overall oversubscription level of 3.3x. Subseries 2005B-2a had $298.6 million in orders (3.2x oversubscribed) and Subseries 2005B-2b had $318.6 in orders (3.4x oversubscribed).
Orders were received from 9 different investors across both subseries, including 2 new investors that SWS introduced to the Clarity bidding platform. After a successful pricing, SWS recommended that the Authority tighten yields by 1 bp in order to take advantage of the oversubscription, but also seek to retain the broadest possible number of investors to ensure robust future weekly bidding.