On February 12, 2020, School District 131 Kane County, Illinois (East Aurora) (the “District”) sold $30,990,000 General Obligation School Bonds (Alternate Revenue Source), Series 2020A and $20,805,000 General Obligation Refunding School Bonds, Series 2020B with Loop Capital Markets (the “Firm”) as sole manager. The Bonds were rated A1 underlying by Moody’s and all maturities were enhanced by Assured Guaranty Municipal (“AGM”) with ratings of AA (Stable) by S&P. Bond proceeds were used to (i) pay costs of altering, repairing and equipping school buildings and facilities of the District and improving sites; (ii) refund certain maturities of the District’s outstanding General Obligation Refunding School Bonds, Series 2010A; and (iii) pay costs of issuance.
The Firm guided the District from pre-marketing to pricing, providing preliminary investor reads with feedback to the District, organizing a one-on-one call with a major investor, and hosting the District’s Superintendent, CFO and five students to participate in the pricing. The Firm provided a session on the industry and the financing process. The transaction was initially 8.4x oversubscribed and the Firm was able to tighten spreads between five and ten basis points across all maturities due to strong investor interest. Following these adjustments, $89.435 million of orders dropped, resulting in priority orders to total $349.780 million or 6.8x subscription. A variety of investors participated in the transaction, primarily Bond Funds, followed by SMAs, Money Managers, Insurance Companies and Hedge Funds. Ultimately, the Series 2020A Bonds generated an All-In True Interest Cost of 2.638% and the Series 2020B Bonds generated Net Present Value Savings of $741,928 or 3.165% of refunded par and All-In True Interest Cost of 1.715%.