On February 8, 2022, Loop Capital Markets served as the Senior Manager on San Diego County Water Authority’s (the “Water Authority”) $170 million Water Revenue Bonds, Series 2022A (the “Bonds”). The Bonds were rated Aa2 (Stable) / AAA (Stable) / AA+ (Stable) by Moody’s, S&P, and Fitch, respectively.
Bond proceeds were used to finance a portion of the design, acquisition and construction of various capital projects in furtherance of the Water Authority’s Capital Improvement Program. The Bonds had a maturity structure, comprised of serial maturities from 2023-2042 and term bonds in 2047 and 2052. Serials structured with 5% coupons from 2023 to 2037 and 4% coupons in 2038 and thereafter while the 2047 and 2052 term bonds both had a 5% coupon, all with a 10-year call.
The Firm assisted the Water Authority in developing a comprehensive internet roadshow, primarily aimed at highlighting its credit and financial strength, progress with water supply diversification and water conservation efforts to address the drought and continued success in operating through COVID-19 among other things. The roadshow was ultimately viewed by 29 research analysts and investors. The Firm’s banking team, led by our dedicated credit and rating agency specialist, also worked very closely with the Water Authority to help develop a clear and effective rating agency presentation, which resulted in a positive change from a negative to a stable outlook from S&P.
Following the release of the POS and investor roadshow, the Firm’s salesforce actively began the pre-marketing process and contacted a broad range of prospective accounts. We also helped setup a one-on-one virtual meeting with an investor to help address credit questions which resulted in the investor putting in over $85 million in orders. The Firm was able to bring in orders from 27 new investors who were not current holders of the Water Authority’s debt. The Firm’s marketing efforts resulted in over $756 million in orders from 48 investors in total. Ultimately, the Firm successfully priced the Bonds in a challenging market characterized by heightened volatility, tightening muni market liquidity, and MMD cuts of up to 5 bps across the curve. The All-In TIC for the transaction was 3.08%.