he Series 2023 issuance represented the firm’s first senior managed transaction for the District. The Series 2023 Bonds reflect a sale of a total of $71 million voter authorized general obligation bonds approved at an election held on November 8, 2022. The proceeds will be used for the acquisition, construction, renovation and equipment of school buildings in the District, including a new elementary school, expanding Lockhart High School and the purchase of land for school sites and facilities.

The Series 2023 Bonds are tax-exempt and structured as 30-year fixed-rate serial bonds maturing in years 2023 - 2043, a term bond in 2048 and 2053. The Bonds are optionally callable at par beginning on 8/1/2032 except maturity 2033 which is optionally callable on 8/1/2024. SWS worked with the District and Financial Advisor to implement a short call date to help manage the District’s I&S tax rate in 2024 and was able to execute a short call date for the 8/1/2033 maturity (1-year par call – 8/1/2024 @ 100%).

The District Bonds were sold as Permanent School Fund (PSF) guaranteed which resulted in PSF insured ratings by Moody’s of Aaa and Fitch of AAA. The months leading up to pricing, PSF, a $56 billion sovereign wealth fund, rejected nearly all applicants to its debt guarantee program in November, marking the first time in about a decade it’s turned borrowers away due to a lack of capacity. Only five of the 49 applicants that month were approved, including of Lockhart ISD. The PSF backed bonds received strong investor demand for the District. To minimize the potential volatility on the day of pricing, SWS coordinated with the FA and District to price the bonds early as Federal Reserve Chairman Powell was scheduled to testify at 10 am ET before the House Financial Services Committee. 

SWS coordinated with the FA to perform an in-person pricing with the District’s Superintendent, Chief Financial Officer and Board President, allowing the District to have an interactive discussion as the bonds were in the municipal bond market. The SWS-led syndicate generated over $571 million orders from 57 distinct institutional investor accounts. Overall, the transactions was 8.3x oversubscribed on a priority basis, achieving oversubscription on all maturities. At reprice, SWS’ underwriting desk proposed lowering yields on all maturities by a range of 1 to 12.5 bps and recommended lowering coupons on the term bonds. The District achieved an TIC of 4.10%.