On May 19, 2026, SWS priced GLWA’s $786.2 million Water System Revenue and Revenue Refunding Series 2026ABCD bonds and $239.7 million Sewage Disposal System Revenue and Revenue Refunding Series 2026ABC bonds.

The transaction was complex for both Systems, consisting of a mix of senior and second liens with refunding and new money components.

The transaction generated NPV savings of $45.4 million (7.2%) for the Water System and $22.5 million (9.7%) for the Sewer System, which helped GLWA achieve over $1 billion in total debt service savings since the Authority’s inception in 2016.

Across the 7 series that were marketed SWS generated $2.4 billion in combined priority orders from 82 investors. SWS underwrote balances of $106.2 million to maintain the integrity of the order book. This was SWS’s fifth consecutive senior managed transaction for the Authority.

Use of Proceeds:

Proceeds of the Water Supply System Bonds will be used (i) to refund certain Bonds for debt service savings, (ii) to pay costs of capital improvements to the Regional Water System and (iii) to pay certain costs of issuance.

Proceeds of the Sewage Disposal System Bonds will be used (i) to refund certain Bonds for debt service savings, (ii) to pay costs of capital improvements to the Regional Sewer System and (iii) to pay certain costs of issuance.

Structuring & Quantitative Process:

GLWA, SWS and the Authority’s financial advisor (“PFM”) worked collaboratively to develop a plan of finance for the Water and Sewer Systems. For the Water System, the Series 2026A and 2026B current refundings were structured for uniform savings.

Certain refunded bonds (Series 2016C and 2016D) had been partially tendered in 2025 for debt service savings; however, a 50% tender acceptance cap was utilized in 2025 to preserve future current refunding savings, which were realized in this transaction. Simultaneously, the Series 2026C and 2026D bonds funded $208 million in new money capital needs.

Series 2026C maturities from 2027 through 2046 were structured around cashflow savings of the Series 2026A and 2026B current refundings so that the Authority’s aggregate debt service increased as uniformly as possible and avoided any spikes, with remaining maturities structured for level debt service.

Series 2026D was structured as a mandatory tender “soft put” Term Bond maturing in 2056, with a 2030 mandatory tender date. The put bond was strategically structured as second lien debt with a long-dated maturity to utilize variable rate capacity in where would otherwise be GLWA’s highest cost fixed-rate debt.

30-Year MMD was approximately 180 basis points higher than 4-Year MMD, generating significant debt service savings in the initial period by utilizing the mandatory tender structure compared to fixed-rate debt, while staying within GLWA’s debt policy.

Additionally, the put bond further diversified GLWA’s investor base, bringing in 5 investors new to GLWA.

The Sewer System was structured similarly, with the Series 2026A and 2026B current refundings sized for uniform savings. The refunded bonds (Series 2016B and 2016C) had been partially tendered in 2025 for debt service savings; however, a 50% tender acceptance cap was utilized in 2025 to preserve future current refunding savings, which were realized in this transaction.

The Series 2026C bonds funded $32 million in new money projects; 2030 through 2036 maturities were structured around aggregate cashflow savings, while remaining maturities were structured for level debt service, similar to the Water System.

Market Conditions and Pricing Performance:

The market was weak leading up to the pricing due to geopolitical tensions as President Trump rejected Iran's terms of a peace proposal coupled with inflation concerns.

The supply the week of May 18th was anticipated to be heavy with approximately $13.2 billion of bond issuance, including $2.6 billion of utility bond issuance. GLWA’s combined par amount made this transaction the largest transaction of the week at $1.03 billion.

On the morning of pricing, treasuries opened weaker and other transactions were cutting to get ahead of additional anticipated rate cuts, so SWS recommended to cut 2-3 basis points across the curve from pre-marketing levels for both transactions going into the order period to build an order book; the put bond was left unchanged.

During the order period, SWS generated $2.4 billion in priority orders across both offerings with maturity subscription levels ranging from 0.0x to 7.4x.

Between preliminary pricing and repricing, spreads were primarily left unchanged with select tightening and widening.

The Water System’s Senior Lien spreads were tightened by 5 basis points in the 2027 maturity and widened by 2 basis points in the 2039-2043 maturities. The only Second Lien spread change was for the put bond; both coupon and spread were tightened by 5 basis points, reflecting the strong demand.

The Sewer System’s Series 2026C (Senior Lien) spreads were widened by 2 basis points in the 2039-2046 maturities, with the remaining maturities and all 2026A and 2026B maturities unchanged.

SWS supported GLWA's transactions by underwriting approximately $106.2 million (10.3% of par amount) of unsold balances at the time of the offer to preserve the integrity of the order book.

Order Book & Marketing Process:

An extensive premarketing effort led by SWS in the days leading up to the sale generated demand from a wide variety of institutional accounts.

Marketing outreach efforts included 70 unique investor views of the Preliminary Official Statements, and 41 unique investor views of the investor roadshow.

Of the roadshow viewers, 20 unique investors followed through with orders on either the water or sewer bonds.

Institutional Orders:

The Water System transaction received $2.05 billion in priority orders. 57 unique investors participated, including 24 institutional investors that did not participate in GLWA’s 2025 water transaction. The Sewer System transaction received $377.15 million in priority orders and 25 unique investors participated, including 8 institutional investors that did not participate in GLWA’s 2025 sewer transaction.

Subscription Levels:

GLWA’s transactions were supported by a mix of buy and hold accounts and relative value accounts. Orders were received from a mix of investors including insurance companies, bond funds, separately managed accounts (“SMA”), and bank portfolios​. Water System: Subscription levels (excluding stock) totaled 2.6x for the water system overall, demonstrating precise pricing levels​. Sewer System: Subscription levels (excluding stock) totaled 1.6x for the sewer system overall, demonstrating precise pricing levels.