Minority-Owned Firm to Handle Texas Water Development Board Bond Worth $430 Million

On Thursday, the nation’s largest minority-and-women-owned financial firm, Siebert Williams Shanks & Co L.L.C. (SWS), said it has successfully managed a $350 million tax-exempt bond issuance for the Texas Water Development Board. The company stated that its sales for this week would be enough to provide funds to the Clean Water State Revolving Fund and the Water State Revolving Fund programs. The federal-state partnerships support clean water infrastructure statewide.

SWS reported that the bond, which received a rating of “AAA” by S&P Global Ratings and “AAA” by Fitch Ratings were structured to generate and aggregate a $430 million project fund, with principal maturing serially (in years 2021-2040), and a 10-year call option at par.

In a report by Thomson Reuters, it was further revealed that the bond sale was momentous, and it is the largest municipal bond ever executed by a Minority and Women-owned Business Enterprise (M/WBE) firm for a Texas state agency.

In addition to this, since the outbreak of the coronavirus pandemic in the United States in March, no such sales have been made in Texas. In fact, the bond sales are one of the largest tax-exempt, negotiated transactions brought to market by a Texas issuer.

Within the first 30 minutes the bond was offered, the Texas Water Development Board, a state agency received an impressive number of orders, with 80% of the total principal amount subscribed for. At the end of the period, the SWS generated over $1.7 billion in orders from 61 institutional investors. This made the overall transactions almost five times its subscription amount.

“This successful bond offering will provide substantial resources for the people of Texas to preserve and protect our most basic natural resource, water,” Peter M. Lake, chairman of the Texas Water Development Board stated. “At the same time, by closely analyzing rapidly-developing bond market conditions, Siebert Williams Shank priced the issuance to reduce yields and save money for taxpayers across our state.”

Keith Richard, managing director & head of Texas Region for SWS, stated, “With financial uncertainty in the markets related to the COVID-19 pandemic, our analysts worked tirelessly to monitor and respond to current conditions in preparation for the bond issuance. “Those efforts resulted in a successful offering that was attractive to major institutional buyers.”

Also, Thomson Reuters reported that the Texas Water Development Board offering was one of 12 transactions, totaling over $1.8 billion. With this, Siebert became the third-ranking senior manager of Texas negotiated transactions for the first half of 2020.