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Broward County, FL



Water and Sewer Utility Revenue Bonds, Series 2022A

February 2, 2022


Image by Sam Mgrdichian

Proceeds of the Series 2022A Bonds will be used to (i) pay all or a portion of the costs of additional improvements to the County’s Water and Sewer Utility System (the “2022 Project”); (ii) fund the increase in the Reserve Account Requirement; and (iii) pay costs of issuance.

The Series 2022A Bonds were marketed in a volatile environment, with MMD rates increasing by 12 bps to 17 bps from the time the POS and investor roadshow were posted on January 26th, to the time the bonds were pre-marketed on February 1st.

SWS prepared an investor presentation for the sale that highlighted the County’s economic strengths and its strong recovery from the COVID-19 pandemic, the strengths of the County’s Water and Sewer Utility credit, and the County’s strategic management of its Water and Sewer Utility debt, as demonstrated by its healthy debt service coverage ratios both in the near and long terms. The investor presentation was viewed by 16 investors, and 6 of those investors were among the 51 investors that placed orders for the Series 2022A Bonds. SWS explored alternative couponing and term structures in an effort to meet varying investor demand and achieve the best pricing results. 

The 2022A Bonds were pre-marketed on February 1st and priced on February 2nd. After gauging investor interest for the bonds, SWS ultimately recommended a structure utilizing serial maturities from to 2028 to 2045 and one term bond in 2047 and the use of 4% coupons for maturities 2038 through 2047. 

The Series 2022A Bonds were 9.7x oversubscribed (excluding stock orders), with a majority of orders being placed in the 2045 serial maturity (12.8x) and the 2047 Term Bond (9.7x). Spreads were tightened by 2 bps to 5 bps in maturities 2029 through 2037, and by 10 bps to 12 bps in maturities 2038 through 2047 compared to the spreads that were shown to investors during the pre-marketing process. 

Due to the favorable pricing results, level of overall interest and tightened spreads, the County chose to upsize the transaction by 10%. The Series 2022A Bonds achieved an all-in TIC of 3.097%.

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