DALLAS — Houston reaped $207.5 million in present-value savings over 15 years through a $1.3 billion refunding of combined utility system debt on March 13, controller Ronald Green said.
The deal included taxable and tax-exempt bonds rated AA by Standard & Poor's and Aa2 by Moody's Investors Service. The tax-exempt bonds drew a true interest cost of 3.2%, while the tax-exempt priced at 3.6%, Green said.
"Our expanded investor outreach and continued transparency, including a recently unveiled investor relations web page and an annual investor conference, appear to have paid off handsomely," Green said.
In addition to demand from previous purchasers, the deal attracted 46 new investors who placed orders totaling more than $455 million, Green said. Investors placed $2.7 billion of priority orders for the tax-exempt offering of approximately $693 million.
"We were able to leverage this strong demand and press for lower interest rates to increase the savings on both transactions," Green said.
Houston City Council Member Jerry Davis, vice chair of the Budget and Fiscal Affairs committee, attended the pricing in New York, along with other city staff.
"I felt it was critical for me to actively engage in a deal of this magnitude and complexity," Davis said. "I was extremely pleased with the performance and the significant savings on both transactions, which were led by Siebert Brandford Shank and JPMorgan."
Other members of the syndicate included Citi, Loop, Barclay's, Ramirez, Wells Fargo, Goldman Sachs, Piper Jaffray & Co, Hutchinson Shockey Erley & Co, Jefferies, Raymond James and RBC Capital Markets.
First Southwest and Kipling Jones acted as financial advisors for both deals.
