City of Sugar Land
Helping the City finance essential water and wastewater improvements
Background
The City of Sugar Land, Texas, issued $38,550,000 Waterworks and Sewer System Revenue Bonds, Series 2026, to finance water, wastewater and surface water improvements, as well as costs of issuance. The City serves an estimated population of 111,026 through its municipally owned and operated waterworks and wastewater system. The bonds were rated AA by both Fitch and S&P.
Opportunity & Implementation
The City sought to finance essential utility system improvements while achieving attractive borrowing costs in a competitive market. Baird worked with the financing team to develop a marketing strategy that highlighted the City's strong credit profile and essential-service utility system, supporting broad investor interest across the maturity schedule.
Solution
Baird helped market the $38.5 million financing to a broad base of institutional investors, generating an aggregate order book approximately 2.9 times the bonds available for sale. Strong demand across key maturities created opportunities to reduce yields where investor interest was greatest while maintaining balanced demand throughout the transaction.
Results & Impact
The financing was well received by investors, resulting in attractive borrowing costs for the City. The 2044 maturity attracted the strongest demand, with investor orders totaling approximately 5.5 times the bonds available and supporting a 5-basis-point reduction from preliminary pricing. The 2029 maturity generated approximately 4.3 times investor demand, allowing yields to be reduced by 4 basis points. Across the strongest portions of the yield curve, yields were reduced by 3 to 5 basis points, while the remaining maturities were successfully placed at preliminary pricing levels. Strong investor demand helped lower borrowing costs while supporting the City's investment in its water and wastewater system.
