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Board of Governors of Wayne State University
(“Wayne State” or “the University”)



General Revenue Refunding Bonds, Series 2023A

August 16, 2023


Image by Sam Mgrdichian

Purpose: The Bonds were issued to current refund certain outstanding General Revenue Bonds, Series 2013A (the “Bonds”), for debt service savings and to pay certain issuance costs. 

Structure: SWS structured the tax-exempt fixed-rate Bonds with serial maturities from November 15, 2024-2026 and in 2029-2040 to optimize targeted cash flow savings and capture yield curve slope opportunities. SWS structured the transaction to optimize the University’s desired upfront refunding savings targets in FY 2025 and 2026. SWS proposed a long first coupon – to May 15, 2024 – enabling the University to delay its first interest payment without penaltyand enhanced its short-term cash flow benefit. SWS worked closely with the University’s municipal advisor to solicit bond insurance bids and evaluated a maturity-by-maturity break-even analysis which generated additional savings, compared with an uninsured transaction. On the day prior to pricing, SWS evaluated and proposed structuring the transaction with four percent coupons for the final two maturities which lowered the all-in true interest cost by approximately three basis points and further increased cashflow savings.

Pricing Results: SWS generated $85 million in priority orders from 15 different investors (2.0x oversubscription). Six investors had not previously reported holding the University’s bonds

Bond funds and separately managed accounts represented the largest percentage of investor participation. At re-pricing, SWS tightened spreads across most maturities by approximately four basis points from pre-marketing levels, lowering the all-in TIC to 3.79% and further enhancing cash flow savings. To preserve the pricing integrity and support the University’s transaction, SWS committed its capital to underwrite 17% of unsold balances or approximately $7.3 million in Bonds.

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