Transaction Details

City of Decatur

Municipal

Placement Agent

Decatur leverages forward delivery to lock in rates for refunding  

The City of Decatur, Illinois (the “City”), a regional center of manufacturing and agribusiness with about 70,000 residents, continues to invest in infrastructure and community development. As part of its long-term financial management strategy, the City identified an opportunity to improve efficiency and reduce borrowing costs through the issuance of refunding bonds.

Proceeds from the sale of the City’s $26,560,000 General Obligation Refunding Bonds, Series 2025B were used to (i) currently refund a portion of the City’s outstanding General Obligation Bonds, Series 2016 (Green Bonds) and Series 2018, and (ii) pay costs related to issuing the new bonds.

To take advantage of favorable market conditions while aligning with future call dates, the City used a forward delivery bond structure. This allowed the City to lock in interest rates at the time of sale, even though the bonds will not be delivered and settled until a later date. The approach provided rate certainty, generated refunding savings, and ensured funds would be available when needed—without the costs or limitations of a traditional advance refunding.

Baird served as placement agent, partnering with the City’s financing team to negotiate competitive terms with potential lenders. After engaging more than 20 banks, Baird secured a fixed interest rate of 4.00%, resulting in a streamlined, cost-effective financing that supports the City’s ongoing investments in its community. The transaction achieved more than $2 million in cash savings for the City.