Behind the Deal: Beech Grove Central Schools Building Corporation

School City of Beech Grove is located in Marion County, Indiana, with five public schools serving approximately 2,800 students ranging from pre-K through grade 12 for the 2024 school year. The School City of Beech Grove had an outstanding taxable bond that was eligible to be converted to tax-exempt. Baird refinanced the outstanding taxable bond to tax-exempt and provided approximately $100,000 in debt service savings for the School Corporation. The remainder of the issue was for construction and site improvements, including the purchase of buses, technology, and equipment. Baird also structured the Bonds to provide majority of the savings in the first two years to help the School Corporation get closer to the $0.80 debt service tax rate.

Baird priced the Bonds on a Monday in advance of one of the highest supply weeks of the year. After the first order period, Baird had $100,000 sold in the 2035 maturity. Our underwriting desk saw more passes from investors than anticipated due to a rising interest rate environment and additional supply coming throughout the week. Our underwriters worked balances on scale after the order period and had one investor clean up the bonds with maturities ranging from 2025-2027 and 2029. Baird finished by making minor pricing adjustments on the remaining maturities. Despite challenging market conditions, Baird took down $5,500,000 million of unsold bonds to provide debt service savings and the lowest possible borrowing rate for the School Corporation.       

By the end of the week, interest rates had increased 24 basis points, highlighting Baird’s decision to price on a Monday and successfully complete the transaction.