New bond insurer Build America Mutual insured its first bond issue Thursday.
BAM guaranteed $10 million of York Suburban School District, Penn., general obligation bonds. The proceeds from the sale will refund a portion of the district's outstanding Series 2007 GOs.
"We are pleased to have completed our first insured transaction for the York Suburban School District, an issuer that is representative of our core target market — small to medium-sized issuer of general obligation or essential public-purpose revenue bonds," said BAM chief executive officer Seán McCarthy. "We look forward to providing insurance for many similar bond issues in the months and years ahead."
RBC Capital Markets was underwriter for the negotiated deal. "We think that investors will become familiar with BAM quickly," said Ken Friedrich, RBC's manager of municipal sales, trading and syndication.
Standard & Poor's had given York a stand-alone rating of A with a negative outlook.
"As a result of its refunding transaction, the York Suburban School District was able to realize debt-service savings to the district and its taxpayers of roughly $1,502,000 over the life of the financing, amounting to $1,289,000 when expressed on a present value basis," according to an RBC source.