Case Study: Hutto ISD
The Background
Hutto Independent School District (the “District”) is located in the City of Hutto, within Williamson County, Texas, about 25 miles northeast of the City of Austin, Texas. The City of Hutto has a population of over 27,500, with farming and ranching as the primary economic focus, although with other job opportunities in the nearby cities. The District has 12 locations within the City with facilities for alternative education programs, elementary schools, middle schools, and high schools. Over the past ten years, enrollment has increased by over 60%, with the 2022/2023 class enrollment at 9,771.
The Need
On August 8, 2023, Baird served as Senior Managing Underwriter for Hutto Independent School District’s (the “District”) $143 million Unlimited Tax School Building Bonds, Series 2023 (the “Bonds”). Proceeds of the Bonds will be used for (i) constructing, renovating, improving, acquiring, and equipping school facilities, including two new elementary schools, build-out of the 9th grade center, renovations to the existing high school, additions to the existing middle schools, Career and Technical Education facilities, and District-wide technology infrastructure and upgrades, the purchase of the necessary sites for school facilities, and the purchase of school buses; (ii) for acquiring and updating instructional technology equipment; (iii) to fund capitalized interest on the Bonds; and (iv) to pay costs of issuance related to the Bonds.
The Solution
Baird worked closely with the District and its municipal advisor leading up to the bond sale. The District desired a community awareness campaign through its webpage and social media channels. Baird’s team worked with the District in getting materials on their website and social channels to drum up community support, generate awareness and educate potential retail investors of the offering.
Baird pre-marketed the financings with aggressive spreads, but in leading up to the pricing, reduced the scale 5-8 basis points due to firm treasuries. On August 8, the day of pricing, Baird received an influx of orders from different buyers resulting in the Bonds being nearly 25 times oversubscribed due to Baird’s distribution capabilities and quality of our sale force and their relationships. The Bonds were repriced with a 10-14 basis point bump beyond the 2025 maturities, resulting in a lower cost of borrowing, ultimately benefiting the issuer.
