Transaction Details

Village of East Dundee

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Baird served as sole underwriter to the Village on its issuance of $5,545,000 General Obligation Bonds, Series 2024 which carried an “A3” underlying rating and “AA” rated bond insurance. Proceeds will go towards the construction of a new parking garage in the Village’s downtown and to refinance outstanding tax increment revenue bonds for debt service savings.

Baird initiated pre-marketing with investors two days prior to pricing. During the order period, we received over $11.5 million in orders (2x the par amount). We were able to adjust the yields of the 2034 term lower by 3 basis points (0.03%) and the 2038 term lower by 5 basis points (0.05%) which had oversubscriptions of 3x and 5x, respectively.

The Village elected to refinance outstanding tax increment revenue bonds as general obligation bonds given the TIF District was generating more than sufficient increment to repay the debt and Moody’s was already including this revenue debt as direct debt when evaluating the Village’s credit. The Village was able to liquidate multiple bond funds associated with the prior bonds (including the debt service reserve fund) to downsize the refunding bond issue. The Village achieved gross debt service savings of $981,117, annual debt service savings of approximately $140,000, and present value savings of $121,349 (5% of the refunded par). The savings generated by this refunding means the Village could allocate additional tax increment towards other TIF eligible projects.