Transaction Details

Santa Monica – Malibu Unified School District

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Baird’s California K-12 Public Finance Group Underwrites for One of the Top Issuers in California

Baird’s California K-12 Public Finance group served as senior managing underwriter on the $80,000,000 General Obligation Bonds of School Facilities Improvement District No. 2 of Santa Monica-Malibu Unified School District (Malibu Schools) Election of 2018, Series C (“the Bonds”) transaction. Santa Monica-Malibu Unified School District was established in 1875 and is located in Los Angeles County. The school has 8,700 students in Transitional Kindergarten through 12^th grade in eight elementary schools, three middle schools, two comprehensive high schools, a continuation high school, a K-8^th grade alternative school and a Project-Based Learning High School pathway. The Bonds are the third and final series relating to the School Facilities Improvement District No. 2 (the “Improvement District”) Election of 2018 issued by the Santa Monica-Malibu Unified School District (the “District”) and the net proceeds of the Bonds will be used to finance school facilities of the District located within the Improvement District.

Following a volatile market environment in the weeks leading up to the District’s issue, on the day of pricing, the Producer Price Index (PPI) released at a lower-than-expected forecast providing stability in the market. Baird’s underwriting desk assessed the market and adjusted the scale by 2-4bps prior to release, resulting in the transaction being well received, which comes as no surprise as the District is one of the top issuers in California. During the order period, the Bonds achieved full subscription (4.5x subscribed) with maturities through the first 5 years seeing the greatest participation. The desk continued to adjust the scale to successfully complete the transaction, pricing the bonds at spreads to MMD that were the tightest when compared to Aa1/AA+ and even AAA/Aaa rated K-14 issues that priced in the preceding 3 weeks in California. In total, 36 different accounts participated.

Ultimately, the District saved over $91 million in total debt service over the life of its School Facilities Improvement District No. 2 (Malibu Schools) Election of 2018 bond program when compared to the initial estimates it provided to voters in 2018.