On May 23, 2023, the City of San Antonio, Texas – Electric and Gas Systems (CPS Energy) priced its $636.580 million Revenue Refunding Bonds, New Series 2023AB with Loop Capital Markets serving as the bookrunner and lead dealer manager for the tender financing. Since 2021, there have been many tender offers in the municipal market, and this transaction represents the largest tender offer in the State of Texas during this timeframe.

The New Series 2023A Bonds were issued to takeout $500 million of commercial paper that initially financed Winter Storm Uri costs, and the New Series 2023B Bonds were issued to purchase the accepted tendered bonds. $823.610 million of CPS Energy’s Taxable New Series 2020 and Taxable New Series 2022 Bonds were offered for tender. Of which, $218.935 million (or 26.580% of the offered amount) of the target bonds were tendered by investors and accepted by CPS Energy. In connection to the tender, CPS Energy achieved $14.238 million PV savings, or 6.503%  – resulting in $28.579 million of cashflow (gross) savings. The tender for the taxable bonds was financed on a tax-exempt basis. The tax-exempt refunding bonds were sold with 4.00% – 5.50% coupons with a call date in 2033, giving CPS Energy greater option value for the potential future refunding of these Bonds since the refinanced taxable bonds had very low coupons.

The transaction came to market during the current U.S. Treasury debt default discussions, where there was significant volatility in the interest rate markets leading up to the projected June 1st deadline. Despite challenging market conditions, the transaction generated $1.191 billion of total priority orders from approximately 50 accounts, reflecting 1.8x overall subscription. At the end of the order period, there was a balance of $108.960 million. An extended order period was then held for the benefit of the syndicate after the verbal award. At the end of the extended order period, the Firm underwrote $29.775 million of the Bonds.

On May 17, 2023, Loop Capital Markets served as Sole Manager for Jefferson Union High School District’s (San Mateo County, CA) $42.5 million General Obligation Bonds, 2020 Election (Measure Z), Series A (“2020A Bonds”) and $22.4 million 2023 General Obligation Refunding Bonds (“2023 Refunding Bonds”) (collectively, the “Bonds”) rated AA- by S&P.

The 2020A Bonds’ proceeds will be applied to finance school facility improvements, authorized by District voters at an election held in November 2020 (Measure Z). The 2023 Refunding Bonds’ proceeds will be applied to refinance on a current basis the District’s General Obligation Bonds, 2012 Election, Series A (issued in 2013). Our bankers worked closely with the District’s Municipal Advisor to tailor each series’ amortizations to achieve the District’s tax rate objectives for the two, separate underlying Bond Authorizations.

To assist in the marketing effort, our banking team researched the existing top reporting holders of the District’s outstanding GO Bonds, as well as other top reporting holders of California K-12 GO Bonds. Loop’s sales force generated over $367 million in orders from 39 unique accounts (5.7x oversubscription). This included 35 new investors (not previously reporting holders of the District’s GO Bonds) and four repeat buyers. Despite large “cuts” (increases) in the MMD Index on the day of pricing, ranging from 4-12 basis points, our desk was able to leverage the size and diversity of the order book to tighten spreads by three to seven basis points across the curve. Ultimately, the new money 2022A Bonds achieved an all-in TIC of 3.669%, and the 2023 Refunding Bonds generated over $1.5 million of gross taxpayer savings ($1.2 million present value, or 4.67% NPV).

On May 16 and 17, 2023, the Philadelphia Redevelopment Authority sold its $124.080 million City Service Agreement Revenue Bonds, Series A (Neighborhood Preservation Initiative (“NPI”)) (Federally Taxable Social Bonds) (the “Series 2023A Bonds”) and Series B  of 2023 (NPI) (Tax-Exempt Social Bonds) (the “Series 2023B Bonds”) and City Service Agreement Revenue Refunding Bonds, Series C of 2023 (Neighborhood Transformation Initiative (“NTI”)) (Tax-Exempt) (the “Series 2023C Bonds, and collectively, the “Series 2023ABC Bonds” or the “Bonds”). Loop Capital Markets served as bookrunning senior manager.

The Bonds are rated A1 (Stable), A (Positive) and A (Stable) by Moody’s, S&P and Fitch, respectively. Bond proceeds were used to (i) finance certain costs of the NPI Program, including certain program-wide administrative costs, (ii) refund certain outstanding Revenue Refunding Bonds, Series 2012 (City of Philadelphia NTI) and (iii) pay costs of issuing the Series 2023ABC Bonds. The borrowing is the second transaction under the NPI Initiative and will provide $100 million in project funds. The City self-designated the Series 2023A and 2023B Bonds as Social Bonds.

The Firm reviewed the rating agency presentation and developed the investor presentation with the City and Co-Financial Advisors which was viewed by 20 investors. Throughout the pre-marketing process, the Firm provided investor feedback to the City and Co-Financial Advisors. The City and Authority received strong interest with over $234 million of priority orders or 2.9x overall subscription for the taxable series and over $86 million of priority orders or 2.0x overall subscription for the tax-exempt tranches. 20 investors ultimately participated in the taxable tranche while 10 investors participated in the tax-exempt tranches. Due to strong investor demand, the Firm was able to tighten spreads on the Series 2023A Bonds by 5-12 basis points for several maturities between the Indications of Interest and Launch periods. The Bonds had an All-In TIC of 5.09% and the refunding achieved present value savings of 2.1% of the refunded par amount.

On April 25, 2023, Loop Capital Markets served as the Book Running Senior Manager for the New York State Environmental Facilities Corporation (“Corporation”) for its $150.96 million State Revolving Funds Revenue Bonds, Series 2023A (2010 MFI) (Green Bonds). The bonds are rated Aaa by Moody’s, AAA by S&P and AAA by Fitch with a stable outlook from all three rating agencies.

The Bonds were issued to currently refund $171.09 million of outstanding Series 2012B, 2012E and 2013B Bonds. The refunding produced $15.9 million or 9.32% of PV savings and an All-in-TIC at 3.25%. A net roadshow was produced to detail the credit highlights, legal protections inherent in the structure and the financial strength of the Corporation. The net roadshow was ultimately viewed by 52 investors.

The bond sale period was comprised of a one day of Retail Order Period (“ROP”) on Monday, April 24, followed by an Institutional Order Period (“IOP”) on Tuesday, April 25. At the end of the ROP, there were $618.3 million of retail orders, approx. 4.1x oversubscription. After the ROP, the Corporation entered the market with $75.7 million of bonds offered for the IOP due to the 50% allocation rule. At the end of the IOP, there were $342.7 million of institutional orders. Loop Capital’s salesforce worked diligently to produce superior results and generated total of $918.2 million from 59 accounts. Subscription levels for all maturities ranged from anywhere between 0.6x and 16.7x, with overall subscription level of 6.1x. Due to strong subscription levels, the Firm was able to lower yields by 2 to 15 bps going from retail to institutional order period. The transaction was priced during volatile market conditions with the Fed having increased the Fed Funds rate by 50 bps in 2023 which was preceded by 425 bps of increases in 2022. Loop Capital underwrote $1.7 million of unsold bonds to support the transaction.

On April 19, 2023, Loop Capital Markets served as joint bookrunner on State of Illinois’ (the “State”) $2.5 billion General Obligation Bonds, Series of May 2023ABCD. The transaction was rated A3 (Stable) / A- (Stable) / BBB+ (Positive) by Moody’s, S&P and Fitch, respectively. Moody’s upgraded the State’s general obligation bonds from Baa1 to A3 to reflect the State’s improving governance with further growth in reserves that are at their strongest level in over a decade and increasing payments to its pension plan. Proceeds of the bonds were used to (i) fund accelerated pension benefit payments, (ii) finance capital expenditures authorized by the State’s previous capital programs and the Rebuild Illinois capital plan (iii) provide funds to finance information technology projects under the State’s previous capital programs and Rebuild Illinois and (iv) refund outstanding Series A of January 2012, Series March 2012 and Series May 2012 general obligation bonds of the State.

Due to strong investor demand, spreads tightened between 10 and 20 basis points for the Series 2023A, up to 15 basis points for Series 2023B, up to 5 basis points for 2023C and up to 13 basis points for Series 2023D. Select maturities in the 7- and 10-year range of Series 2023B, 2023C and 2023D saw interest rates increased by five basis points. Loop Capital Markets’ salesforce generated 10 priority orders from a local municipality and investment managers. The Firm assisted in reviewing the State’s rating agency and investor presentations and provided input throughout the planning process for the live investor breakfast as the Firm previously hosted an investor meeting for the State and Governor JB Pritzker in 2019. The financing generated an All-In TIC of 4.233%. The refunding generated present value savings of $102.25 million or 8.38% of the refunded par amount.

On January 26, 2023, the City of St. Louis Missouri (the “City”) and St. Louis Lambert International Airport (the “Airport”) sold its $64.935 million Airport Revenue Bonds, comprising of $60.080 million of Airport Revenue Bonds, Series 2023A (Non-AMT) and $4.855 million of Airport Revenue Bonds, Series 2023B (AMT) (the “Bonds”) with Loop Capital Markets serving as Book Running Senior Manager. The Bonds are rated A2 (Stable) and A (Stable) by Moody’s and Fitch, respectively recognizing the enplanement recovery and route expansion at the Airport.

Bond proceeds will be used to (i) finance the costs of the construction and improvement of the Airport, (ii) fund the purchase of a debt service reserve surety for the Bonds, and (iii) pay costs of issuance for the Bonds. The Firm assisted the City and Airport in creating the rating agency and investor presentations. The transaction was well received with almost all 33 investors having viewed the POS and investor presentation during the pre-marketing process. Additionally, the City and Airport answered questions received from investors during the pre-marketing process. The Firm provided the City, Airport and Financial Advisors read sheets with investor feedback throughout the pre-marketing period.

The City and Airport received strong interest with over $136 million of priority orders or 2.1x overall subscription. Investors primarily consisted of Bond Funds and SMAs. Due to strong investor interest, spread to MMD was reduced between 2 and 4 basis points, at spots along the yield curve, between pre-pricing and final pricing. The Bonds had an All-In TIC of 4.14%.

On January 19, 2023, New Jersey Economic Development Authority (“NJEDA”) sold its $160 million State Lease Revenue Bonds (Offshore Wind Port Project), 2023 Series A (Federally Taxable) (Green Bonds – Climate Bond Certified)  (the “Bonds”) for which Loop Capital Markets served as Bookrunning Senior Manager. The Bonds are issued under the state appropriation credit for the State of New Jersey and represent the NJEDA’s inaugural issuance for the New Jersey Wind Port Project (“NJWP Project”), the first purpose-built offshore wind port in the U.S. Bond proceeds will finance a portion of the preconstruction and construction costs for Phase 1 and Phase 2 of the NJWP Project. The bonds received the highest Green Bond designation by the Climate Bond Initiative with a Second Party Opinion provided by Kestrel and the bonds are also the first Climate Bond under the Marine Renewable Energy Sector Criteria in the U.S.

The Bonds are rated Baa1 and BBB+ by Moody’s and S&P, respectively, with positive outlooks. Loop’s banking team assisted the NJEDA in creating a thorough investor presentation to explain the two phases of development of the NJWP Project, the Green Bond and Climate Bond designation, the lease/lease-back structure of the Bonds between the State and the NJEDA, and the fundamental economic strength of the State. The transaction was well received with significant investor interest as illustrated with over 65 unique investor views of the POS and investor presentation and Loop coordinated four 1 x 1 investor calls and handled multiple investor queries. Overall, the bonds had strong subscription levels.  Loop tightened the credit spreads by up to 20 bps from IOIs to Guidance and by an additional 5 bps at the Launch/final pricing.

On December 6, 2022, Loop Capital Markets served as Senior Manager for the State of Ohio’s (the “State”) $377 million General Obligation Bonds, Series 2022 consisting of $176.790 million New Money Bonds (Infrastructure program) and $200.335 million Refunding Bonds (Infrastructure, Conservation, and Common Schools programs). The Bonds were rated Aa1 (Positive) / AA+ (Stable) / AAA (Stable) by Moody’s, S&P, and Fitch, respectively.

This transaction was the State’s inaugural G.O. bond issuance since receiving a positive outlook by Moody’s and a “AAA” rating from Fitch – the State’s first AAA G.O. bond rating since 1978. Proceeds of the bonds were used to (i) fund $200 million in new money capital projects for the Infrastructure program, which funds local government road and water and sewer projects, and (ii) current refund $216.48 million of outstanding G.O. bonds for PV debt service savings totaling $17.182 million, or 7.93% of bonds refunded. The State capitalized on the strong momentum of the municipal market and decided to accelerate the pricing by one day.

Loop’s banking team assisted the State with a comprehensive and targeted credit rating strategy, which focused on the State’s strengths (i.e., improving demographics and financials vs. select AAA-rated states). Prior to pricing, Loop developed a list of target investors (top holders of the State’s bonds and top G.O. holders of select highly rated states that are not the top holders of Ohio’s bonds). Throughout the pre-marketing process, the Firm provided the State and its municipal advisor with investor feedback, including investors expected to place orders and any rationale from non-participating accounts.

Constructive feedback from investors throughout pre-marketing led to 54 unique institutional accounts placing orders during the order period, 19 of which were new investors for the State’s G.O. credit. The Firm generated $1.9 billion in priority orders, or 5.0x oversubscription. After repricing, the transaction finished with $1.6 billion priority orders, or 4.4x oversubscribed.

On November 16, 2022, Loop Capital Markets served as Bookrunning Senior Manager on Ohio Water Development Authority’s ( “OWDA”) $150 million Drinking Water Assistance Fund (“DWAF”) Revenue Bonds, Series 2022A (Sustainability Bonds) (the “Bonds”). The Bonds are rated Aaa (Stable) by Moody’s and AAA (Stable) by S&P. The Bonds were classified as Sustainability Bonds with a Second Party Opinion from Kestrel Verifiers. Proceeds from the transaction will fund lending to local government agencies in Ohio for water and sewer projects.

Loop Capital Markets assisted OWDA in creating a comprehensive electronic investor roadshow for the transaction. 17 investors viewed the roadshow between the release of the preliminary official statement and pricing. The Firm’s banking team compiled an investor analysis that helped identify underrepresented investors by cross referencing with holders of certain categories. Throughout the pre-marketing process, the Firm provided OWDA with investor feedback, including investors expected to place orders and the rationale from non-participating accounts.

Strong market dynamics including strong investor reads from pre-marketing, pricing was accelerated by one day. 47 institutional accounts participated in the transaction with $1.4 billion in priority orders resulting in 11.6x oversubscription. The Firm generated $355 million of orders in aggregate from nine ESG bond funds. Given the robust results of the order period, the Firm was able to tighten spreads by up to 25 bps between pre-marketing levels and final pricing. Of the accounts that remained following adjustments, 29 investors were new to the DWAF credit and 13 investors were new to OWDA. Due to strong demand, the transaction was upsized by $25 million.

On November 15, 2022, the New York City Municipal Water Finance Authority (“NYW”) priced $750 million of Second Resolution Revenue Bonds, Fiscal 2023 Series AA, Subseries AA-1, AA-2 and AA-3 (the “Bonds”). The Bonds were rated Aa1/AA+/AA+ by Moody’s, S&P and Fitch, respectively. Bond proceeds were used to fund capital improvements, refund certain outstanding bonds and pay costs of issuance. Loop Capital assisted NYW in developing a comprehensive internet roadshow, primarily aimed at addressing the credit highlights and legal protections inherent in the structure, and the financial strength of NYW. The roadshow was viewed by 58 research analysts and investors.

The transaction was the largest negotiated transaction of the week. The Bonds priced during volatile market conditions with the Fed having raised the Fed Funds rate 375 bps in 2022.  However, lower-than-expected October Consumer Price Index inflation rate on November 10 spurred a rally in the fixed income market with the ten-year Treasury and MMD decreasing by 28 bps and 12 bps, respectively.  This improvement in the market increased the savings enough so the refunding component which was originally “out of the money” now met NYW’s refunding threshold.  The benign Producer Price Index release on the morning of the retail order period reinforced the favorable market tone.  As a result, Loop and NYW decided to accelerate the Institutional Pricing after only half day of retail order period. Ultimately, orders were placed by 85 unique accounts. The retail order period generated $445.6 million in orders, followed by an institutional order period that generated $3.3 billion in orders, resulting in at 4.6x oversubscription. Despite market volatility, NYW achieved superior pricing results. Due to strong subscription levels, the Firm was able to lower yields by 5 to 8 bps from the retail order period, and lower up to an additional 10 bps depending on the maturity in the final pricing.

The refunding of the Series 2013BB 5% coupon bonds generated $16.3 million PV savings, or 5.67%, and $32.0 million of cashflow savings for a TIC of 4.63%. Because of the overall subscription and the need for additional new money proceeds, the par amount was increased from approximately $682 million to $750 million.