County of Davidson
Delivering an Efficient Refunding Through Strong Investor Demand and Market Execution
Background
Baird served as Senior Managing Underwriter for Davidson County, North Carolina’s (the County) $21,000,000 Limited Obligation Refunding Bonds, Series 2026 (the Bonds), which carried ratings of Aa2 (Moody’s) and AA (S&P). The Bonds were issued to refinance the County’s outstanding Series 2016 Bonds and pay associated issuance costs, generating debt service savings for the County.
Opportunity
The County sought to refinance its Series 2016 bonds to achieve interest cost savings while maintaining flexibility within its overall debt portfolio. The financing was brought to market during a period of heightened municipal market volatility, with spreads widening across portions of the curve the afternoon prior to pricing.
Despite the challenging conditions, the County’s strong credit profile and solid market fundamentals created an opportunity to attract investors seeking high-quality municipal paper offering attractive relative value.
Implementation
Baird worked closely with the County and financing team to structure and market the refunding bonds to maximize investor participation and pricing efficiency. The bonds were offered with a maturity structure designed to appeal to a broad base of institutional and retail investors.
During the order period, the 2027–2030 maturities saw particularly strong demand, with order books ranging from 4.4x to 7.4x the available bonds. This strong participation supported final yields between 2.20% and 2.31%.
Investor demand remained solid through the intermediate portion of the curve, with the 2031–2032 maturities attracting 1.5x–3.2x subscription levels, while the 2033–2034 maturities priced in line with prevailing market levels and cleared successfully.
The 10-year portion of the curve experienced especially strong interest, with the 2035–2036 maturities each receiving more than five times the available orders, resulting in final yields of 2.74% and 2.86%, respectively.
Results & Impact
The financing generated strong investor demand across the maturity spectrum, reflecting the market’s positive reception to Davidson County’s credit quality and the transaction’s structure.
Through proactive marketing and disciplined execution, Baird helped the County achieve attractive borrowing costs while successfully navigating a volatile market environment. The refunding enabled the County to capture approximately $1,114,872.38 in net present value debt service savings, efficiently refinancing outstanding obligations while maintaining strong market access.
The successful transaction reinforced Davidson County’s continued strength in the municipal market and demonstrated Baird’s ability to deliver effective execution and measurable savings for its municipal clients.