Transaction Details

Antelope Valley Joint Union High School District

Municipal

Lead Bookrunner

Baird’s California K-12 Public Finance group served as sole managing underwriter on $74,985,000 Antelope Valley Union High School District (Counties of Los Angeles and Kern, California) General Obligation Bonds (Dedicated Unlimited Ad Valorem Property Tax Bonds) 2024 Election, 2025 Series A (the “Bonds”). The District is a union high school district organized under the laws of the State, officially organized in 1912. The District is primarily located in the northern portion of the County of Los Angeles (“Los Angeles County”), with a small portion located in the southern portion of the County of Kern (“Kern County” and, together with Los Angeles County, the “Counties”), and includes the incorporated cities of Lancaster and Palmdale, and the unincorporated areas of each of the Counties. The District covers approximately 1,700 square miles (~ the size of the state of Rhode Island) and provides education services to a population of approximately 400,000 residents. The District currently maintains eight comprehensive high schools, one early college high school program with Antelope Valley Community College District, four alternative high schools, and one adult school. The District also has two middle schools and one virtual school operated through Academies of the Antelope Valley (the District’s dependent charter school). Additionally, the District authorized the charter for Desert Sands Charter School, which is direct funded but operates independently from the District and is not considered a component unit of the District.

The District’s enrollment for Fiscal Year 2024-25 is projected to be 21,445 students (includes dependent charter school enrollment). The proceeds of the bonds are being used for the construction, improvement, furnishing and equipping of certain District facilities under Measure AVH ($398,000,000) to finance projects approved at the November 5, 2024 election.

During the week of pricing (May 19th), the municipal market faced a deluge of supply ahead of the upcoming holiday weekend, with both negotiated and competitive calendars running heavy. Despite the volume, absorption across the curve was steady, though the long end showed modest signs of softness.

Supply continued to weigh on the municipal market with approximately $11 billion in tax-exempt issuance hitting during a week already marked by macroeconomic and geopolitical volatility. Competitive and negotiated desks both faced challenges as long-dated maturities struggled to gain traction. Across the board, order periods showed decent demand inside of 20 years, but liquidity thinned materially past that mark. Rating upgrades provided marginal support for select credits, though even stronger paper couldn’t escape the gravitational pull of rising Treasury yields. The broader tone was cautious, with desks adjusting scales mid-session to clear balances and protect positions.

The District was able to capitalize by entering the market on Wednesday, May 21 heading into a good/stable tone. The District also received a rating upgrade from Moody’s to “Aa2” which brought excitement to investors. Baird placed the Bonds with 59 separate orders in aggregate for the bonds to complete the transaction. By completing the bond sale on this day, the Bonds were able to secure lower interest rates than other similarly rated and higher rated transactions that priced the same day while some other similarly sized and rated transactions were pulled from the market by other dealers.