Public Finance

On September 22, 2026, Loop Capital Markets served as Bookrunning Senior Manager on the $285 million San Diego County Water Authority (the “Water Authority”) Water Revenue Bonds, Series 2026A rated Aa2 (Stable) by Moody’s and AA+ (Stable) by S&P. Proceeds of the bonds will finance capital projects for the Water Authority in furtherance of the Capital Improvement Program. The transaction marked the Water Authority’s first market appearance since 2022.

The financing came amid a challenging market environment shaped by Federal Reserve action, geopolitical tensions, higher oil prices, and renewed municipal fund outflows. Pricing followed the September 16 FOMC meeting, when the Federal Reserve raised its target rate by 25 basis points to a range of 3.75%–4.00%, its first increase since July 2023. On pricing day, despite early optimism around potential diplomacy in the U.S.–Iran conflict, the market’s initial enthusiasm dwindled with broader weakness across oil, Treasuries and municipals, with MMD yields rising 3–10 basis points in the first ten years of the curve.

Despite the volatility and an $11.2 billion new-issue calendar, Loop generated more than $1.7 billion of orders from 68 investors. The order book included 45 investors that had not participated in the Water Authority’s 2022 transaction, demonstrating broad new interest in the credit. Loop used the strength and diversity of demand to tighten spreads by 2–9 basis points from pre-marketing levels to final pricing. Importantly, aggregate orders remained at approximately $1.7 billion after repricing.

Loop’s banking team and our dedicated credit and rating agency specialist worked with the Water Authority and its municipal advisors on the rating agency strategy. The banking team also assisted the Water Authority in developing the investor presentation which was viewed by 21 investors. The 2026 Bonds originally comprised of serial maturities from 2027-2046 and term bonds in 2051 and 2056 using all 5% coupons. To respond to market conditions and broaden demand, Loop extended serial maturities through 2048 and used 5.25% coupons on the 2051 and 2056 term bonds. The financing achieved a final all-in TIC of 4.73%.