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Bexar County Hospital District



Certificates of Obligation, Series 2022

September 8, 2022


Image by Sam Mgrdichian

The Series 2022 Bonds are secured by a limited ad valorem tax on all property within the District (coterminous with Bexar County). Proceeds of the bond sale will fund the construction of two new community hospitals and other ambulatory facilities throughout the county. This bond issuance was the inaugural issuance of a $950 million capital improvement plan to construct the two new community hospitals. Both hospitals will initially have capacity for 140 beds with the flexibility to increase to 240 beds should there be a future need and are expected to open between 2026 – 2027

Since the bonds are secured by property taxes, the first two years of the structure was amortized to fit within the District’s goal of a level tax rate with the remaining 30-year term structured with a level debt service. 

To generate a broad investor interest, the bonds were offered with a mix of 5.00% premium coupon bonds and sub-5.00% discount bonds and the 2047 tern bond was subject to a 5.5-year par call on 2/15/2028. The shorter call would provide the District with future financial flexibility should there be excess tax revenues whereby it can defease debt earlier to reduce interest cost. There were 56 institutional investors that submitted $1.08 billion in priority orders with potentially 19 new investors

Each maturity was fully subscribed for (1.3x to 7.6x). 

With this robust order book, SWS reduced pricing spreads by 2 to 7 bps throughout the yield curve, except for the 2026 maturity that was 1.3x subscribed for. After this re-pricing, there were $58 million in orders that dropped; All-In TIC of 4.38%. 

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