Central Noble Community School Corporation
Efficient Refinancing to Capture Savings in a Dynamic Market Environment
Background
Central Noble Community School Corporation (the School Corporation) is a public school district located in Noble County, Indiana, serving approximately 1,100 students across its K-12 system.
The School Corporation, through Central Noble 2012 Building Projects, Inc., refinanced its outstanding 2014 bonds to generate upfront savings in the first maturity. Rather than lowering total debt service, the Corporation applied these targeted savings to address minor capital projects.
Opportunity
Like many school districts, the School Corporation aimed to take advantage of favorable market conditions to lower borrowing costs while maintaining reliable access to capital markets. The district’s objective was to achieve savings while ensuring strong investor participation and minimizing execution risk.
The transaction required a thoughtful pricing approach to navigate a market where demand varied across the yield curve.
Solution
Baird partnered with the School Corporation as sole manager to deliver a refinancing strategy aligned with the district’s financial goals. The $4,810,000 Ad Valorem Property Tax First Mortgage Refunding Bonds, Series 2026, were structured to generate debt service savings while maintaining a strong security framework supported by lease rental payments funded through ad valorem property taxes.
The bonds carried an A- underlying rating with an AA+ enhancement, positioning the credit to reach a broad investor base.
Drawing on experience serving Indiana school districts, Baird executed a disciplined pricing strategy tailored to market conditions. The front end of the curve was managed to ensure orderly execution, while pricing remained responsive as orders developed.
During pricing, the 2026 maturity was adjusted slightly to align with investor demand, while the 2027–2028 maturities held at preliminary levels with solid participation. Strong demand emerged in the 2029 and 2030 maturities, with subscriptions exceeding 3x. Baird leveraged this demand to reduce spreads by 3 basis points, achieving final yields of 2.48% in 2029 and 2.53%–2.54% in 2030.
Longer maturities were supported by consistent institutional investor demand and priced in line with preliminary levels.
Results & Impact
The financing achieved strong demand, with meaningful oversubscription in key intermediate maturities. Baird’s pricing approach enabled the issuer to capture improved pricing where demand was strongest while maintaining consistency across the structure.
The bonds were successfully placed with a diverse investor base, and the refinancing generated debt service savings, supporting the School Corporation’s long-term financial flexibility.