The Regents of the University of California
General Revenue Bonds, 2023 Series BQ & BR
August 16, 2023
BOOKRUNNING JOINT-SENIOR MANAGER
Proceeds from the Bonds were used to finance all or a portion of certain projects of the University of California. The Regents, their Municipal Advisor, and SWS initially planned to structure two bullet maturities in the belly of the curve with the steepest inversion. After the Regents upsized the transaction to provide additional funding for student loan project, the transaction team adjusted the structure to four bullet maturities to have more manageable par sizes for marketing.
In the weeks before pricing, the municipal market saw prolonged volatility due to various headline news items about the financial industry. The market volatility continued into the week of pricing, and the transaction team considered cutting the retail order period short for the 2023 Series BQ bonds and accelerating institutional pricing to August 15. SWS ultimately recommended not accelerating the transaction to take full advantage of the retail order period and get more investor reads
During indications of interest for the 2023 Series BR (Taxable) bonds, SWS’ desk generated over $342.1 million in taxable orders from 22 different investors, including 9 potentially new investors
During the retail order period for the 2023 Series BQ bonds, SWS’ desk generated over $363.3 million of retail orders.
During the institutional order period for the 2023 Series BQ bonds, SWS’ desk generated over $247.5 million in institutional orders from 16 different investors, including 4 potential new investors
SWS used the Regents’ structuring flexibility to achieve the lowest rates. SWS recommended moving approximately $20 million of bonds from the 2031 maturity and $13 million of bonds from the 2033 into the 2035 maturity. The structuring flexibility allowed SWS to achieve very low pricing in a volatile market and lower spreads on the 2033 maturity by 3 basis points during pricing
The 2023 Series BQ bonds had a 3.04% All-in-TIC, and the 2023 Series BR (Taxable) bonds had a 5.10% All-in-TIC.