Transaction Details

Elgin Community College Community College District No. 509

Municipal

Lead Bookrunner

Baird served as sole underwriter on the District’s $29,495,000 Taxable General Obligation Refunding Bonds, Series 2021 and $61,755,000 General Obligation Refunding Bonds, Series 2021B. Bond proceeds were used to refinance outstanding tax-exempt and taxable bonds that were issued in 2010 and 2013 (Series 2010B, 2010C, 2010D and 2013).

To generate interest and community awareness of the bond sale and to leverage ECCD’s highly sought after “Aaa” rating, Baird began marketing the College’s bonds more than two weeks prior to pricing. Working closely with ECCD, Baird developed and helped execute a marketing plan which included publications in three local newspapers, press releases announcing ECCD’s “Aaa/Stable” rating and the bond offering which included potential savings posted to the College’s website and marketing material for Baird salesforce to distribute to individuals and institutions within the community and Illinois.

The week leading up to pricing, Baird “tested the waters” gaining feedback on interest rate levels from investors in an effort to generate the most aggressive pricing the market would accept. Heading into the pricing, tax-exempt interest rates remained fairly flat and taxable interest rates inched upward on the long-end. Additionally, there was a fair number of investors that desired Illinois bonds, but the calendar of upcoming sales was light (limited supply). The pre-marketing, combined with strong demand for “Aaa” credit, resulted in Baird lowering interest rates twice before the pricing date, increasing savings by more than $750,000.

The first “order period” (where investors had the opportunity to place orders for the bonds) lasted two hours and the bonds were oversubscribed (more orders than bonds available) 1-4x on the taxable series and 2-7x on the tax-exempt series.

Baird repriced the bonds, reopening the order period with revised, lower interest rates: the tax-exempt series another 0.05% lower in every maturity except three and the taxable series in a few maturities. At the end of the pricing, more than 38 different investors placed orders for the bonds, 32 of which were new investors to the College according to Bloomberg, casting a wider net of investors for future offerings.

The refunding generated present value savings of $16.8 million (16.57%), $2 million more than the Board originally approved in November 2020. The 2021A refunding generated $3.35 million in present value savings (11.9% of refunded bonds) and the 2021B refunding generated $13.5 million in present value savings (18.4% of the refunded bonds).