Spring Branch ISD brought $307 million of bonds to the market on Wednesday, Oct. 5. Together with premiums, the bonds will yield $323 million in proceeds for the construction and equipping of school buildings, technology equipment and buses. Of the total bond proceeds, $142.2 million will support 2017 Bond projects and $180.8 million will fund 2022 Bond projects.
Despite a rising interest rate environment and periods of market illiquidity, SBISD was in a position to take advantage of a strong bond market this week. This was the largest bond issue in the district’s history and, on Wednesday, was the largest in the market nationwide.
Interest rates fluctuated in the previous days, resulting in a preliminary all-in rate of 4.37% on Monday. However, general high-grade interest rates dropped, which allowed the district to negotiate lower rates. Ultimately, SBISD achieved an all-in borrowing rate of 4.176%.
“I appreciate the great work of our financial advisors, Post Oak Municipal Advisors and Masterson Advisors, and our senior underwriter, Jeffries, on this bond sale,” said Christine Porter, Associate Superintendent of Finance. “Their work, along with our district’s strong bond rating, led to lower interest rates that will save the SBISD community millions of dollars.”
There were 57 major investors supporting the bond issue including Eaton Vance TABS, Goldman Sachs Asset Management, LLC, Frost Investment Advisors, among others.
The bonds are rated Aaa/AAA by Moody’s and Standard & Poor’s based on the guarantee by the Texas Permanent School Fund, with an underlying rating for the District of Aa1/AA. The agencies have maintained such ratings and continue to consider SBISD stable.
“We thank our community for its investment in our students and our district through support for the 2017 and 2022 Bond Programs.”
Leading the district’s bond sale is Porter and David Bender, controller.