Transaction Details

Red Oak Independent School District

Municipal

Lead Bookrunner

Red Oak Independent School District (the “District” or “ROISD”), established in 1912, serves approximately 6,500 Pre-K through 12th grade students across seven campuses in Ellis County, Texas. Known for its close-knit, family-oriented environment, ROISD is preparing for continued growth while offering diverse academic and extracurricular opportunities for every student.

On July 15, Baird served as senior managing underwriter for ROISD’s $171,060,000 Unlimited Tax School Building Bonds, Series 2025 (the “Bonds”). Proceeds from the Bonds will be used for: (1) designing, constructing, renovating, improving, upgrading, updating, modernizing, acquiring, and equipping school facilities, a new middle school, school recreational facilities, including a new track and field, improvements to the baseball and softball fields, and Goodloe Stadium, and (2) paying the costs of issuing the Bonds.

ROISD’s Bonds (Moody’s Aa2 underlying, PSF enhanced) were brought to market with a final maturity of 30 years. Despite a crowded calendar of PSF-backed issues and early softness in the municipal market, the execution was highly successful. Pricing was in line with comparable PSF transactions that priced the same day.

Demand was particularly strong in maturities inside 10 years, allowing for 2 to 3 basis point improvements during repricing. While the 2039 to 2042 range experienced slower activity, we successfully filled all balances by the close of the order period. Further out on the curve, maturities in 2050 and 2055 showed lighter books. With only 20% sold in 2050 and a 1x order book in 2055, we acted quickly and creatively, structuring a bifurcated term bond in 2050 that included a 4.75% coupon, priced to yield 5.03% to maturity, and a 5.25% coupon, priced to yield 4.85% to maturity. This approach resulted in pricing just 3 basis points higher than our initial scale for the 2050 and 2055 terms. That market benchmark experienced 5 basis point increase in those spots that same day. The District and its Municipal Advisor were very pleased with the outcome.