The School District of Philadelphia, PA
General Obligation Bonds, Series 2021A & 2021B (Green Bonds)
October 6, 2021
This was the School District’s first bond sale since the onset of the COVID-19 pandemic
Bond proceeds were used to finance the costs of certain capital projects to be undertaken by the School District of which the Series 2021B financed projects specifically designed to be environmentally beneficial by reducing energy usage in School District buildings.
To inform and educate investors about the transaction, SWS prepared an EMMA notice and a detailed investor presentation. SWS assisted with Green Bond disclosures in both the offering documents and the investor presentation. SWS scheduled an investor one-on-one call with an investor who eventually placed an order for $42.5 million of bonds.
During the pre-marketing period, there were cautious tones in the tax-exempt and Treasury market as investors were reluctant to offer reads as uncertainty surrounding Congressional action to increase the debt limit permeated the market.
SWS had initially pre-marketed a mix of 5.0% and 4.0% coupons to gain the widest investor interest with a bifurcated 2046 term bond, but based on investor reads the 2046 term bond was changed to a single 4.0% coupon
During the order period, the transaction generated over $941 million of priority orders and was nearly 3.0x oversubscribed including orders from 42 unique investors. Despite uneven subscription levels between the two series and MMD being cut by 1 to 2 bps on the day of pricing, SWS was able to tighten spreads by 1 to 10 bps across maturities from 2022 to 2034 serial bonds and 2046 term bond.
Overall, the transaction received significant interest from investors and after the repricing, maturities were oversubscribed by 1.0x to 6.2x.
Due to SWS’ strong marketing and pricing results, the School District achieved an all-in TIC of 2.709% which represents a significant reduction in borrowing costs based on the School District’s historical bond sales.