This transaction serves as SWS’ fifth consecutive senior managed mandate for Arlington ISD.

Proceeds from the sale of the Bonds will be used to refund a portion of the District’s outstanding debt including U/L Tax School Building Bonds, Series 2015; U/L Tax School Building Bonds, Series 2016A and U/L Tax School Building Bonds, Series 2017 bonds. The financing was structed with serial bonds ranging from 2/15/2026 to 2/15/2042. The structure incorporates a 10-year par call.

Municipal new issue supply for the week was heavy with over $16.5 billion of par scheduled to be issued including, three deals over $1 billion. The Texas calendar remained competitive with $1.3 billion scheduled, including $660 million of par for nine Texas School Districts. The bulk of the week’s supply priced on Wednesday, allowing AISD to enter the market ahead of the planned robust national supply. Many issuers planned to issue the week of December 1st to avoid the shortened Thanksgiving week and the expected FOMC meeting on December 10th.

Although supply was elevated, the market was flush with cash from money returning to investors from December principal and interest payments, alongside $679 million of bond fund inflows. In the weeks leading up to pricing, the municipal market remained relatively stable.

Municipal bond yields rose on pricing day by as much as three basis points whereas US Treasury yields decreased by three basis points. Prior to the preliminary pricing order period, the municipal market opened with a steady tone; allowing SWS to enter the market with pricing levels that were largely consistent with pre-marketing efforts as well as changing coupons from 2040 – 2042 to attract maximize investor demand.

Building on SWS’ our previous work as senior and co-manager since 2020 to AISD, SWS created a comprehensive bondholder analysis from previous bond sales, allowing SWS to create a targeted marketing list for the Bonds.​

​SWS marketed the transaction with 5% coupons. During the pre-marketing period, SWS desk received requests from investors for 4% coupons on the 2040 - 2042 maturities – a rare couponing structure for middle part of the yield curve.

The bonds received $153 million in orders from 27 accounts, resulting in 2.6x oversubscription. Given the strong order book, SWS leveraged investor demand for the bonds to reduce yields between two and four basis points across 14 maturities.

Ultimately, the refinancing achieved $5.5 million of NPV savings (7.34% of refunded bonds). The Bonds carried an All-in-TIC of 3.637%.