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Fort Worth Independent School District



Unlimited tax School Building Bonds, Series 2022

August 17, 2022


Image by Sam Mgrdichian

The Series 2022 Bonds represented the inaugural issuance of the District’s historic $1.2 billion bond authorization passed by voters in November 2021. The Bonds were issued to fund 2021 Bond projects, including the construction and renovation of school buildings throughout the District, focusing on middle school upgrades, a new elementary school, replacement campuses, and four Early Childhood Centers.

The District carried an underlying rating of Aa1 by Moody’s and the Bonds were further enhanced by the Permanent School Fund of Texas (Aaa). The Bonds were structured with an outsized 2023 maturity to maintain the District’s I&S Tax Rate, followed by level debt service through 2042. Notably, the structure included two call dates- Serial Bonds maturing in 2033-42 would have a 10yr par call while the 2047 Term Bonds are callable in 6 years. Record inflation, an FOMC intent to raise rates, and unprecedented volatility leading up to and including the day of pricing would test the finance team’s resolve, including sweeping changes in the Daily MMD yields.

With this backdrop and in light of the daily increases in MMD yields and a heavy issuance calendar, SWS’ underwriter recommended a pricing strategy focused on attracting the most investors to the issuance. Early MMD reads released during the order period warned of double-digit increases, but the pace of orders picked up as the morning progressed. In total, SWS generated over $300 million of priority orders (2.2x oversubscribed) from 31 distinct investors, including 20 previously undisclosed (potentially new) bondholders. 

Subscription levels would allow for SWS to recommend no change in yields, despite MMD yield increases of 9 - 17 bps across the curve. Notably, accurate pricing of the atypical 6yr callable bonds allowed for a recommended 2bp yield decrease, despite MMD increasing 9bp that year (2047)

SWS stepped up to underwrite bonds in 2026, 2027 and 2041, totaling $5 million, at initial pricing spreads. The financing achieved and All-in-TIC of 3.88%. 

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