On June 17th, 2025, SWS priced the Great Lakes Water Authority’s $528.2 million Water System Revenue and Revenue Refunding Series 2025ABCD bonds and the $435.0 million Sewage Disposal System Revenue and Revenue Refunding Series 2025ABC bonds. The transaction was complex for both Systems, consisting of a mix of senior and second liens with refunding, new money, and tender components. Across the 7 series that were marketed (four Series for the Water System and three Series for the Sewer System) SWS generated $2.68 billion in combined priority orders allowing for the tightening of spreads at repricing by 0-10 basis points. SWS underwrote balances of $35.1 million to maintain the integrity of the order book and did not request any price cuts despite the balances.

Proceeds of the Water Supply System Bonds will be used to current refund Water System Series 2015A and 2015D Bonds, purchase certain tendered Bonds, and pay for capital improvements and costs of issuance. Proceeds of the Sewage Disposal System Bonds will be used to refund Sewer System Series 2015C Bonds, purchase certain tendered Bonds, and pay for capital improvements and costs of issuance.

For the Water System, all underlying tender refundings within the Series 2025A and 2025B bonds were structured for uniform savings. Within the Series 2025A and 2025B bonds, all underlying current refunding components were structured to be wrapped around aggregate tender cashflow savings to solve for uniform aggregate cashflows savings where possible. In aggregate, $337.02 million in bonds were refunded to generate $33.72 million in cashflow savings ($27.1 million in PV savings, or 8.0% of refunded par).

Simultaneously, the Series 2025C and 2025D new money bonds funded $230 million in new money capital needs and were structured for level debt service from 2039 to 2055. Series 2025C and 2025D maturities from 2027 through 2038 were structured for proportional debt service and amortized to be structured around aggregate cashflow savings of the Series 2025A and 2025B tender and current refunding components so that the Authority’s adjusted aggregate debt service increased as uniformly as possible and avoided any spikes in aggregate debt service.

The Sewer System was structured in a similar manner, with all underlying tender refundings within the Series 2025A and 2025B bonds structured for uniform savings. Within the Series 2025B bonds, all underlying current refunding components (except the 2016 SAWS SRF loan as noted below) were structured to be wrapped around aggregate tender cashflow savings in order to solve for uniform aggregate cashflows savings where possible. SWS would note the refunding of the Authority’s 2016 SAWS (SRF) loan was structured for uniform savings and not wrapped around tender cashflows savings. In aggregate, $429.89 million in bonds were refunded to generate $43.60 million in cashflow savings ($34.35 million in PV savings, or 8.0% of refunded par). The Series 2025C new money bonds funded $50 million in new money projects and were structured for level debt service from 2041 to 2055, while maturities from 2026 through 2040 were amortized to be structured around aggregate cashflow savings, similar to the Water System.

Despite the rise of geopolitical tensions between Israel and Iran, the municipal market was stable leading up to pricing, as evidenced by the successful placement of heavy supply in the preceding two weeks (~$35bn) and 7 straight weeks of municipal bond mutual fund inflows. At repricing, SWS generated $2.68 billion in priority orders across both offerings, consisting of $1.51 billion in priority orders for the Water System and $1.17 billion in priority orders for the Sewer System.

Between preliminary pricing and repricing, spreads were tightened for both the Water and Sewer Systems. The Water System’s Senior Lien spreads tightened up to 10 basis points and Second Lien spreads tightened up to 4 basis points. The Sewer System’s Senior Lien spreads tightened up to 5 basis points and Second Lien spreads tightened by up to 2 basis points. SWS supported GLWA's transactions by underwriting approximately $35.11 million of unsold balances at the time of the offer to preserve the integrity of the order book; and despite these balances, no price cuts were requested as part of the commitment to underwrite.

As Joint Dealer Manager, SWS actively canvassed investors to enhance participation in the tender. Upon tender expiration, more than $625.3 million of bonds were tendered by investors, representing a strong tender participation. SWS would note there was a 50% tender acceptance cap on all tax-exempt maturities to preserve future current refunding savings (targeted tax-exempt bonds had 7/1/2026 par call date).