City of Noblesville
Tailored financing structure helps reduce long-term borrowing costs for utility improvements
Background
The City of Noblesville brought a $22.34 million Aa1-rated financing to market through its Sewage Works Revenue Bonds of 2026. Proceeds will fund improvements to the City's wastewater utility system, including the replacement of Lift Station 20 and rehabilitation of the wastewater treatment plant's headworks, while also covering costs associated with issuing the bonds. The City's wastewater utility serves more than 24,600 customers, and the financed projects will fund improvements to key system infrastructure.
Opportunity & Implementation
As a key member of Noblesville's financing team, Baird worked with the City and its municipal advisor to develop a financing structure designed to reduce borrowing costs while meeting the City's long-term capital needs. The transaction attracted investor participation throughout much of the maturity schedule, with the strongest interest concentrated in the front and intermediate maturities, where subscription levels reached as high as 4.3x the amount offered.
Based on order activity, the financing team lowered yields by two to three basis points in several maturities between 2031 and 2040, while preliminary pricing on the longest maturities remained unchanged during the order period. The resulting pricing carried some of the lowest credit spreads in the recent market.
Results & Impact
Baird’s intimate work with the City highlighted the ability to repay the Bonds more quickly than a standard 20-year borrowing, thereby reducing the City's long-term interest cost by more than $2.5 million. The bonds were priced with yields ranging from 3.31% in 2031 to 4.81% in 2043, and investor participation during the order period supported lower yields in several maturities while maintaining preliminary pricing levels elsewhere in the structure. Ratepayers are the ultimate beneficiary of the City’s conservative and effective financing strategy.
