Transaction Details

Santa Monica-Malibu Unified School District

Municipal

Lead Bookrunner

Baird’s California K-12 Public Finance group served as senior-managing underwriter on the $13,400,000 2025 Certificates of Participation (Federally Taxable) (the “COPs”). Santa Monica-Malibu Unified School District (the “District”) was established in 1875 and is in Los Angeles County. The school has 8,700 students in Transitional Kindergarten through 12th grade in eight elementary schools, three middle schools, two comprehensive high schools, a continuation high school, a K-8th grade alternative school and a Project-Based Learning High School pathway. The proceeds of the sale of the COPs will be used to acquire property located in Santa Monica, California.

On the day of pricing, we experienced a volatile market amidst the tragic Pacific Palisades Fire and its impact on Southern California credits. Just before the order period, Bloomberg released an article discussing the impact the fires will have on the California municipal market, noting they have discovered more than $70 billion in exposed credits following the event creating an unforeseen challenging pricing environment. The District did not lose any school facilities as a result of the Palisades Fire.

The Santa Monica-Malibu Unified School District AA-rated federally taxable COPs issue was structured without a debt service reserve fund and ran 2025 thru 2042, with premium certificates upfront and discount certificates 2038 through 2042. Given the Bloomberg article that was released prior to the order period, activity was slower than usual, but given time, most certificates sold to two separately managed accounts (“SMA”) which served as anchor orders for the COPs sale. The District has structured an internal repayment plan of paying the debt service with redevelopment pass through revenues scheduled to be received from multiple project areas located in the City of Santa Monica (unharmed by the Palisades Fire) through 2042.

The Transaction closed on February 6, 2025. Proceeds of the financing created additional rentable office space located within the District boundaries in the City of Santa Monica. While not by original design, this space is helping local non-public schools that experienced devastating losses because of the Palisades Fire continue to educate their students.