County of Ashe
High Demand Supports Efficient Market Execution
Background
The County of Ashe, North Carolina (the County), accessed the capital markets to finance critical environmental infrastructure projects, including the construction of a new landfill cell and a modern environmental services facility. These investments are designed to support long-term waste management capacity and improve operational efficiency for the County.
To finance these projects, the County issued $13,755,000 of Limited Obligation Bonds, Series 2026. The bonds were structured as an installment financing secured by annual appropriations and a deed of trust on project assets and carried a Moody’s Aa3 rating.
Opportunity
The bonds came to market during a period of higher interest rates and strong performance in the municipal market. Even with rising Treasury yields, investors continued to show solid interest in high-quality municipal credits, particularly for longer-term bonds.
The County’s goal was to secure favorable borrowing costs while attracting a broad group of investors. Achieving that required careful planning, offering attractive initial pricing to build interest while maintaining flexibility to improve pricing as demand became clearer. Baird, acting as sole manager, guided the County through this process.
Implementation
Baird approached the transaction with a structured marketing strategy designed to build early momentum. The bonds were initially offered at levels intended to draw investors across a range of maturities.
Strong market conditions allowed the deal to be brought to market at slightly better levels than originally expected. Investor interest developed quickly, with orders building steadily throughout the pricing process. Demand was especially strong in longer maturities, where investors were willing to commit capital for additional yield.
As demand continued to grow, the County was able to adjust pricing accordingly. Yields were reduced across most maturities, reflecting the strength of investor interest. The longest maturities saw the most notable changes, with the 2044 bonds reduced by 12 basis points and the 2046 bonds reduced by 17 basis points, ultimately pricing at a 4.30% yield with a 4.125% coupon.
Results & Impact
The transaction achieved an exceptional outcome for the County, with the bonds heavily oversubscribed across all maturities, underscoring strong investor appetite for high-quality municipal issuers. This demand allowed the County to lower its overall borrowing costs, particularly in longer maturities where interest was greatest, even amid a higher interest rate environment. More broadly, the deal reflects continued investor willingness to invest in longer-term, high-quality municipal bonds when transactions are thoughtfully structured.
