PORTA Community Unit School District Number 202
Flexible 5-year call structure and strong demand support efficient financing
Background
PORTA Community Unit School District No. 202 (the District), located across Menard, Cass and Sangamon Counties in central Illinois, serves approximately 1,050 students across three facilities. The District relies primarily on local revenues, supplemented by state and federal funding, to support operations.
The District came to market to refinance existing bonds and provide additional financial flexibility. Proceeds were used to refund prior bond issues, increase the working cash fund, and cover costs of issuance. The financing totaled $10,785,000 and was secured by the District’s general obligation pledge.
Opportunity & Solution
The financing came to market as conditions in the municipal bond market improved, creating an opportunity to attract strong investor demand and achieve attractive pricing.
Baird, serving as sole manager, structured the financing into two series to meet investor demand. Working closely with the District and its municipal advisor, Baird developed a structure aligned with the District’s goals and market conditions.
The transaction included a taxable series with maturities from 2026 through 2035 and a tax-exempt series with maturities from 2035 through 2038. Both series were structured with a five-year call option on applicable maturities, providing the District with meaningful flexibility to refinance in the future. Notably, this flexibility was achieved with minimal impact to pricing.
To further enhance marketability, the bonds were insured by Build America Mutual, elevating the credit profile to AA while maintaining an underlying A rating. The dual taxable and tax-exempt structure broadened investor participation and allowed for more targeted distribution across maturity ranges.
Baird also adjusted the timing of the sale, delaying pricing to allow for additional investor outreach. This approach helped build demand ahead of the order period and supported stronger pricing.
Results & Impact
The financing was well received by investors, with demand reaching approximately 1-2x the available bonds across all maturities. This strong demand allowed Baird to maintain the aggressive pricing levels established at the start of the order period.
The District achieved its goals of refinancing outstanding debt and strengthening its financial flexibility. The inclusion of a five-year call option positions the District to take advantage of future market opportunities without sacrificing current pricing, while the use of insurance helped expand the investor base.
Baird’s disciplined approach to timing, structure, and marketing helped the District take advantage of favorable market conditions and execute an efficient financing.
