Transaction Details

Village of Plainfield

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Baird served as sole underwriter on the Village’s $8,610,000 First Lien Water and Sewer System Revenue Refunding Bonds, Series 2024.

Baird identified the Village’s First Lien Water and Sewer Revenue Refunding Bonds, Series 2015 as a potential current refunding candidate in early 2024 following a Moody’s upgrade to “Aa1”. Interest rates increased throughout the spring and summer of 2024, making the refunding uneconomical. Baird actively monitored the market and found a window of opportunity to price the Bonds in August after discussions of a potential Fed rate cut at the July meeting lowered interest rates throughout August.

Baird sold the Village’s revenue bonds one day after a neighboring community’s competitive sale of general obligation bonds which carried a similar “AA+” rating. Water and sewer revenue bonds would typically price 5 to 7 basis points (0.05%-0.07%) higher in rate than the same rated general obligation with no property tax securing the Bonds. Baird’s pricing scale was aggressive compared to this competitive sale, however with the Village of Plainfield’s strong name, the limited supply of essential service revenue bonds in Illinois and our depth of premarketing reads from investors, we decided to proceed with no change in scale.

Baird received $13.6 million in orders (1.6x total par) with oversubscriptions in 5 of 10 maturities by as much as 3.0x. This allowed us to lower the yield in the final maturity by 2 basis points (0.02%). In the end, we sold water and sewer revenue bonds at interest rates that were up to 17 basis points (0.17%) lower than the competitively sold general obligation bonds that carried the same rating.

The refunding generated gross debt service savings of $333,775 or present value savings of $285,128 (3.04% of the refunded par amount) for the Village.