This transaction represents SWS’ first engagement with the District.

Purpose:

The financing represents the first and only tranche of bonds stemming from a May 2024 bond election. Both the election and issuance would be the largest in the District’s history.

Proceeds from the sale of the Bonds will be used for the construction, acquisition, renovation, improvement and equipment of school buildings, including equipment used for school safety and security purposes, Career and Technical Education additions, and for the purchase of new school buses and retrofitting of school buses with emergency, safety, or security equipment; for the acquisition, improvement, equipment and updating of technology, including interactive monitors, computers and tablet devices for students in the District; to fund capitalized interest on the Bonds; and to pay costs of issuance related to the Bonds.

Structure:

The Bonds funded two years of capitalized interest in 2025 and 2027.

The Bonds were structured as serial bonds from 2027 to 2044, with a term bonds in 2049, 2051, and 2054. The Bonds carried a 9-year optional par call, beginning on 2/15/2033.

Market Conditions:

New issue supply was low with only $4.26 bn slated for the week (compared to $13 bn the prior week).

Weak treasury auctions sent UST rates higher by as much as 8 bps. The market saw U.S. treasury yields rise to four-week peaks across the board, as yet another weak debt auction and cautious comments from the Federal Reserve on the timing of the U.S. central banks easing cycle.

Following suit, MMD rose between 7 and 10 bps across every maturity on pricing day, causing volatility in the market and as a result, investors took caution into investing in U.S. municipal bonds.

SWS Marketing:

SWS authored a retail advertisement to attract in-district retail and local business accounts that was used on the Districts website.

SWS pre-marketed the transaction with 5% coupons between 2027 and 2049 and a 4.25% coupon in 2054. After initial investor feedback, SWS added a 5% coupon 2051 term bond and adjusted the 2054 coupon to 4.125%.

Financing Results:

The SWS led syndicate generated over $150 million in orders from 28 investors, representing 8 different investor types.

To ensure the integrity of the order book, the syndicate underwrote $20.6 million of unsold bonds. The District achieved an All-in-TIC of 4.45%.