Deals 05/05/2021

Loop Capital Markets Serves as Bookrunning Senior Manager for the $227.940 million State of Ohio (Treasurer of State) Lease-Appropriation Bonds, Series 2021A

On May 5, 2021, the State of Ohio (Treasurer of State) (the “State”) sold its $227.940 million Lease-Appropriation Bonds, Series 2021A (Mental Health and Administration Building). The Bonds were rated Aa2/AA/AA by Moody’s, S&P and Fitch, respectively.

The financing was the largest lease appropriation-backed financing the State has completed in a number of years. The financing consisted of two series of bonds to finance projects for Mental Health Facilities and Administrative Building Facilities programs. The transaction was structured with 5% coupon bonds and serial maturities ranging between 2022 and 2041 and 10-year par call. The State entered the market with strong technical, highlighted by eight straight weeks of municipal bond fund flows, lower tax-exempt benchmark rates and Muni/Treasury ratios since the State last came to market in April with its lease-appropriation bonds, and in March with its G.O. credit.

Loop’s banking team, in conjunction with the State and the Treasurer’s Office helped answer investor inquiries. In particular, Loop’s banking team worked with the State to answer numerous complex questions from the credit analyst of a major SMA account to address his inquiries regarding the State’s credit, as well as pension and OPEB funding. The investor had not previously been a significant buyer of any of the State’s lease appropriation-backed bonds. The investor placed in more than $153 million in orders, representing the second largest order placed in the transaction.

Throughout the pre-marketing process, the Firm contacted a broad range of prospective and targeted accounts and provided the State investor feedback, including investors expected to place orders and the rationale from non-participating accounts. In addition, Loop’s banking team compiled an investor analysis that helped identify and target 21 underrepresented investors for the State of Ohio appropriation-backed bonds. The Firm’s robust marketing efforts resulted in 7 of the 21 investors participating in the transaction. A total of 40 investors participated in the transaction, which was 5.6x oversubscribed with a total of $1.28 billion in going away orders.

Ultimately, the Firm’s efforts resulted in the State achieving its record low credit spreads for its tax-exempt lease appropriation-backed credit with an All-In TIC of 1.60%.