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City of Lansing (MI)



Capital Improvement and Refunding Bonds, Series 2020

July 30, 2020


Image by Sam Mgrdichian

Proceeds from the Bonds will be used to pay for the cost of certain public improvements in the City, as well as refunding a portion of the City’s 2010 General Obligation Limited Tax Bonds (Taxable – Recovery Zone Economic Development Bonds).

The Series 2020 Bonds were structured with principal maturing serially from 2021 through 2031, and term bonds maturing in 2033 and 2035. The bonds have a May 1, 2030 par call. 5% coupons were utilized from 2021-2030 and 3% coupons for the bonds maturing in 2031, 2033 and 2035. S&P assigned its municipal bond rating of “AA” based upon the fact that each Bond will be insured by Assured Guaranty Municipal Corp.

Despite the City’s improving underlying credit and volatility in the municipal market resulting from the COVID-19 pandemic, SWS, the City, and its municipal advisor judiciously brought the Series 2020 Bonds to a municipal market experiencing historically lows interest rates.

On the day of pricing, the market continued to improve after seeing MMD unchanged on Wednesday and only a 1 bp bump in 2026-2050 on Monday. After the order period closed, SWS was able to garner $10.3 million in total orders from 7 different institutional investors. Bonds maturing in 2031, 2033 and 2035 were oversubscribed from 1.30x to 2.60x, based on priority orders. SWS, stepped in and supported the transaction by underwriting $3.4 million of bonds in the early part of the curve. The City achieved approximately $240k of PV savings or 11.99% of the refunded bonds, and an all-in TIC of 1.86%.

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