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City of Pflugerville, Texas



Combination Tax & Limited revenue certificates of obligation, Series 2023

May 23, 2023


Image by Sam Mgrdichian

The Series 2023 issuance represented the firm’s first mandate for the City.

The Series 2023 Bonds reflect a sale of $153 million which will be used to construct a municipal complex as part of the City’s Downtown East Project which will include city administrative offices and a multi-generational recreation center. The Series 2023 Bonds are tax-exempt and structured as 30-year fixed rate serial bonds maturing in years 2024 – 2043, and term bonds in 2049 and 2053.

The Bonds are optionally callable at par beginning on 8/1/2032.

The City Bonds were sold with ratings from Moody’s as Aa1 and Kroll as AA+. To minimize the potential volatility on the day of pricing, SWS coordinated with the Financial Advisor and the City to price the bonds after the early MMD read was released. On the day of pricing the municipal bond market witnessed volatility with every maturity having MMD cuts (increases) by up to 10 basis points.

Since May 15, 2023 MMD saw rates go up by 44 basis points, due to continued debt ceiling negotiations and Fed policy uncertainties that have hung over financial markets. The national negotiated and competitive calendar was robust during the week of pricing with over $5 billion of supply coming to market. Given the volatility several deals went on a day-to-day basis, awaiting market stability. The SWS-led syndicate generated over $498 million orders from 41 distinct institutional investor accounts. The Series 2023 financing brought 38 new non-current investors to the City’s credit.

Overall, the transactions was 3.3x oversubscribed on a priority basis, achieving oversubscription on all maturities. At reprice, SWS’ underwriting desk proposed lowering yields on eight maturities by a range of 1 to 5 bps despite a difficult market with increasing yields of 10 basis points. The City achieved an All-In True Interest Cost (TIC) of 4.35%.

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