On February 1-2, 2022, Loop Capital Markets served as the Senior Manager for LAWA’s $469.8 million Subordinate Revenue and Refunding Revenue Bonds, 2022 Series C ($307.0 million Private Activity/AMT), D ($101.5 million Private Activity/Non-AMT), E ($20.2 million Governmental Purpose/Non-AMT) and F ($40.9 million Federally Taxable) (the “Bonds”). The Bonds were rated Aa3 (Stable) / AA- (Stable) / AA- (Stable) by Moody’s, S&P, and Fitch, respectively.
The Firm successfully priced both tax-exempt and taxable tranches in a challenging market characterized by heightened volatility, tightening municipal market liquidity, and elevated issuance of airport paper issued since January 1, 2022. The day of pricing, however, saw significant improvement in muni/Treasury ratios (and demand for munis) as MMD remained stable and rallied up to 5 bps, while Treasuries remained flat. The Firm’s robust marketing efforts resulted in over $5 billion in orders from 124 unique investors across the tax-exempt and taxable series. Bond Funds were the largest component of orders of both the tax-exempt and taxable series.
The maturity structure of the Bonds, comprised of serial maturities through 2024 and term bonds through 2049, contained various customized coupons to match demand (all with a 10-year call). The all-in TIC for the transaction was 2.86%.
Ultimately, the Firm was able to manage a complex finance plan which involved multiple constraints and financing goals for each component including new money, refunding and restructuring. The plan allocated debt service for 59 individual projects among 5 cost centers, each with separate targeted average lives. LAWA was also able to maintain cost stability as result of the level debt service new money structure and the $40 million of cash flow relief generated by the refunding/restructuring.