On September 19, 2023, Siebert Williams Shank (“SWS”) served as senior manager for the New Jersey Educational Facilities Authority’s (“EFA”) $183.8 million Higher Education Capital Improvement Fund Issue Series 2023 A (“CIF Series 2023”) and $77.4 million Higher Education Equipment Leasing Fund Program Issue, Series 2023 A (“ELF Series 2023”) (collectively, the “Bonds”). The CIF Series 2023 bonds will provide funds to make grants for 10 projects at nine public and private institutions for the purpose of paying the costs of certain capital improvements and the ELF Series 2023 bonds will provide funds to finance the cost of purchasing certain higher education equipment for lease for 25 projects at 21 public and private institutions.

The State maintains four revolving bond programs, which were established by the State Legislature to directly address funding for the preservation, renewal, and construction of facilities and equipment at New Jersey’s institutions of higher education and the creation of a regular financing mechanism to support the growing needs of these institutions. Prior to the bond sale, Moody’s Investor Service, S&P Global Ratings, and Fitch Ratings affirmed their ratings of “A2”, “A-”, and “A”, respectively. The ratings highlighted the State’s stable outlook on its strong management of reserves, long-term liabilities, and budgetary surplus. In addition, the EFA and its financing team created the first ever investor presentation to highlight the Higher Education Capital Grant Programs, recent developments in the State, and the bonds’ security features detailing the state contracts and legal obligations to make appropriations.

The Bonds were strategically priced on Tuesday, September 19th ahead of the Federal Reserve’s Open Market Committee meeting. The transaction received significant investor interest and after the order period, the transaction received nearly $2.4 billion of priority orders from 99 investors and was nine times oversubscribed. Despite the difficult market, the strength of the order book allowed the underwriting team to lower bond yields by five to 16 basis points across all maturities. This resulted in the EFA and the State achieving significantly lower credit spreads, as compared to the State’s most recent appropriation transaction which priced less than four months earlier.