Transaction Details

City of Rowlett

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On Tuesday, August 20, 2024, Baird served as senior managing underwriter to the City of Rowlett (the “City”) on its Series 2024 General Obligation Bonds (“GO Issue”), Series 2024 Combination Tax and Revenue Certificates of Obligations (“CO Issue”) and Series 2024 Tax Notes (“Tax Notes”). Proceeds from the sale of the obligations will be used to refund existing obligations for debt service savings, street and road projects and park and recreational improvements. The GO Issue was structured with serial maturities through February 2044, the CO Issue was structured with serial maturities through February 2041 and a term bond due February 2044, and the Tax Notes were structured with serial maturities through February 2031.

Early August brought interest rate volatility and heavy Texas supply resulting in wider credit spreads for Texas paper. Benchmark municipal rates stabilized somewhat as the month wore on, and just ahead of the order period for Rowlett, news of probable revisions to jobs data sparked a positive tone. Baird released all three series at similar levels, and as expected, the larger GO Issue performed the best. We were able to decrease yields 1 to 5 bps for bonds maturing 2027-2032 and 2039-2041. The CO Issue had smaller block sizes that limited interest for bonds maturing 2033-2041. Yields on these maturities were increased 3 bps to clear the market. Nonetheless, we were successful in reducing yields for 2029-2030 maturities by 4 bps and the yield on the 2044 $2.21 million discount term bonds by 3 bps. Baird’s sales team generated over $72 million in orders from 23 unique investors to support the transaction, and the final aggregate true interest cost for the three series was 3.82%.