DALLAS — Fort Worth Independent School District on Jan. 14 priced the first $123 million from a $490 million bond authorization approved by voters last November.
The district drew yields of 3.96% on 5% coupons maturing in 2039, according to Municipal Market Monitor data.
"The pricing went very well and was a direct result of high demand," said Hank Johnson, deputy superintendent for the district. "We were able to re-price in our favor. As a result, final rates were better than the level of my hopes."
The negotiated deal was led by JP Morgan with a 40% stake. Co-managers Raymond James & Associates, Inc., Estrada Hinojosa & Co., and Siebert Brandford Shank & Co. each carried 20%.
The district's underlying ratings of Aa1 from Moody's Investors Service and AA from Standard & Poor's rise to triple-A with a wrap from the Texas PSF, which reduces borrowing costs for school districts in the state.
JP Morgan executive directors Laura Powell and Douglas Hartman were lead bankers on the deal.
First Southwest vice chairman David Medanich and managing director Laura Alexander serve as financial advisors.
Attorney Dan Settle with Kelly Hart & Hallman is co-bond counsel with Newby & Davis partners Brian Newby and Wendy Davis.
With this deal, Moody's shifted its outlook on the underlying ratings to stable from negative.
"We believe the district's solid financial performance in fiscal 2013, which was better than previous estimates, bolstered the district's reserve and overall financial position," Moody's analyst James Hobbs said. "We believe the financial performance will continue and reserve levels will be maintained in the near-term."
Before this deal, FWISD had $627.7 million in outstanding general obligation bonds.
"We believe the district's debt burden will remain manageable over the near term," Hobbs said.
On Nov. 5, voters approved $386.5 million in bonds for school building and technology, $73.3 million for specialty schools, and $30 million for buses. All three propositions won more than 72% of the 22,500 votes cast.
