Howard County
Flexibility amid market volatility supports successful Howard County financing
Background
Howard County brought a $105.34 million financing to market through the Howard County Jail Building Corporation's Lease Rental Revenue Bonds of 2026. Proceeds will be used to acquire the existing Howard County Courthouse and finance the construction of a new county jail facility, including office facilities, administrative space and other operational improvements. The bonds carried underlying A+ ratings and benefited from Build America Mutual (BAM) bond insurance and investor protections through the state intercept statutes.
Opportunity & Implementation
As a key member of Howard County's financing team, Baird worked with the County and its municipal advisor to bring the financing to market during a challenging trading session as yields moved higher and conditions weakened across the municipal market.
As market conditions weakened throughout the morning, the underwriting team adjusted pricing by approximately 5 basis points across the curve before the start of the order period. The adjustment helped attract investor demand across much of the maturity schedule, particularly in front and intermediate maturities where subscription levels reached 5.0x in 2029 and 5.3x in 2030. The strength of the order book supported yield reductions of 2 basis points at repricing, while benchmark rates rose 5-8 basis points throughout the day.
Demand remained healthy through the 2036 serial maturities, with most maturities fully subscribed or oversubscribed despite broader market volatility. While investors were more selective in longer maturities, the financing team made targeted structural adjustments to enhance marketability and broaden distribution.
Results & Impact
Despite market volatility, the financing attracted broad institutional participation and was successfully distributed across the maturity schedule. Strong credit characteristics, including an underlying A+ rating, BAM insurance and Indiana's state intercept statute for property tax bonds, combined with responsive pricing and structural modifications, helped support investor demand throughout the sale.
