Philadelphia Redevelopment Authority
City Service Agreement Rev Bonds, Series 2021A (Taxable) & Series 2021B (Tax-Exempt)
October 13, 2021
Bond proceeds were used to finance the costs of the City of Philadelphia’s Neighborhood Preservation Initiative. The City will invest up to $400 million over several transactions ($100 million in this initial transaction) in key programs to improve and enhance affordable housing options, commercial corridor improvements, and neighborhood infrastructure projects.
To inform and educate investors about the structure of the transaction, SWS prepared a detailed investor presentation. SWS assisted with Social Bond disclosures in the offering documents, rating agency and investor presentation. Due to the eligibility of certain projects to be financed with tax-exempt proceeds, SWS analyzed the optimal maturities to structure the tax-exempt bonds with the highest yield benefit to in effect reduce the borrowing costs for the City.
During the holiday shortened week, there was little activity in the municipal market as municipal fund inflows fell. Despite slightly higher-than-expected CPI data, UST yields decreased and MMD held steady throughout pricing. After the order periods, the transaction in aggregate generated nearly $264.4 million of priority orders, including orders from 27 unique investors and $5 million of orders from an ESG investor, equating to nearly 2.7x oversubscribed maturities (1.0x to 5.6x on a per maturity basis).
Overall, the transaction received strong interest from investors (13 were new investors to the credit) allowing for the aggressive taxable spreads to be tightened by 5 to 11 bps on select maturities over the course of pricing. Due to SWS’ aggressive pricing results, the City achieved an all-in TIC of 2.878%.