Transaction Details

Cibolo Creek Municipal Authority

Municipal

Lead Bookrunner

Delivering a Successful Financing for Critical Regional Wastewater Infrastructure

Background
Baird served as Senior Managing Underwriter for the Cibolo Creek Municipal Authority’s (CCMA or the Authority) $8,390,000 Contract Revenue Bonds, Series 2025 (South Wastewater Treatment Plant Expansion Project). CCMA was created in 1971 and provides regional wastewater treatment services to a consortium of local governments northeast of San Antonio, including the communities of Schertz, Cibolo, Selma, Randolph Air Force Base, and portions of Live Oak, San Antonio, and Universal City. The Authority’s service area has experienced significant population and economic growth, driving increased demand for reliable wastewater treatment capacity and continued system investment.

The South Wastewater Treatment Plant Expansion Project is a joint effort by the City of Schertz, the City of Cibolo, and the Authority to expand wastewater service to southern Schertz, southern Cibolo, and the Interstate 10 corridor. The project will expand the current capacity of the Original System of 500,000 gallons per day up to 3 million gallons per day.

Opportunity
As development accelerated across the region, CCMA sought long-term, cost-effective financing to support a major expansion of the South Plant while maintaining stable costs for its contracting communities. The Authority entered the market during a period of elevated rate sensitivity, requiring a thoughtful approach for a modestly sized, bank-qualified issue.

Clear communication of CCMA’s AA- underlying rating, the essential-service nature of wastewater treatment, and the area’s strong population growth were important to positioning the credit effectively. Structural and credit-enhancement options were reviewed to ensure broad investor appeal. The decision to utilize AG insurance further strengthened the credit profile and helped draw additional institutional interest.

Solution
Baird partnered closely with the Authority’s municipal advisor to structure a transaction that supported project funding needs and resonated with investors. Early efforts focused on presenting CCMA’s strong credit fundamentals and the strategic importance of the South Plant expansion, helping create a clear and consistent message leading into the sale.

The Bonds were structured with 5.00% serial maturities through 2035, 4.50% term bonds at a slight premium due 2037, 2039 and 2041, and term bonds at a slight discount due 2043 and 2045. This provided a balanced maturity schedule that aligned with investor demand and supported long-term rate stability for the Authority.

Leading up to pricing, Baird monitored market conditions closely and maintained ongoing communication with the Authority’s advisor to ensure the transaction was positioned to take advantage of a favorable execution window.

Implementation
On pricing day, investor interest reflected the effectiveness of the preparation and the clarity of the credit. The issue received steady demand across the curve, with maturities inside ten years 1-2x subscribed and longer maturities 2-4x subscribed.

As the order period progressed, Baird recommended revisions to several maturities to reflect the strength of investor participation. The 2037, 2041, 2043, and 2045 maturities saw improved pricing based on demand, while 2026 through 2028 were underwritten as offered due to lighter interest.

The municipal advisor expressed strong satisfaction with the outcome, noting the balanced distribution, successful placement of all maturities, and the overall effectiveness of the execution.

Results & Impact
The Series 2025 Bonds achieved the Authority’s objectives by securing cost-effective financing for a critical regional infrastructure project while maintaining stable long-term debt service obligations. The final results reflected the strength of CCMA’s credit profile and the benefits of a well-coordinated financing strategy.

With funding in place, the South Wastewater Treatment Plant Expansion Project will move forward, supporting the region’s continued growth and ensuring capacity to meet future service needs. The successful execution demonstrated investor confidence in CCMA’s essential-service role and contractual revenue structure, while highlighting Baird’s ability to deliver a tailored and effective financing solution for a growing Texas utility.