Transaction Details

Harris County

Municipal

Lead Bookrunner

Delivering a High-Performing Transaction for One of the Nation’s Largest Toll Road Systems

Background
Baird served as Senior Managing Underwriter for Harris County, Texas’ $227,440,000 Toll Road First Lien Revenue Refunding Bonds, Series 2025A, supporting one of the nation’s largest and most heavily used regional toll road systems. Harris County is a political subdivision of the State of Texas located in southeast Texas and, through the Harris County Toll Road Authority (HCTRA), oversees a broad network of toll facilities that generate reliable enterprise revenues and maintain strong credit ratings (“AA”/“Aa2”). Home to over 5 million residents, Harris County is the nation’s third-most populous county and encompasses Houston, the fourth-largest city and fifth-largest metro area in the country.

The County sought to optimize its capital structure by refunding outstanding senior lien bonds and commercial paper notes, while maintaining flexibility for future infrastructure needs. Given the scale of the financing and the long maturity profile of the bonds, the transaction required coordinated planning and a disciplined approach to pricing and investor communication.

Opportunity
As market conditions shifted, Harris County and its advisors identified a timely opportunity to capture lower borrowing costs and generate long-term savings by refunding portions of its outstanding 2015B Senior Lien Revenue Bonds and First Lien Revenue Commercial Paper Notes. The favorable rate environment created a window to execute a long-dated transaction extending from 2026 to 2055. Successfully capitalizing on this moment required careful monitoring of market movements, thoughtful structuring to appeal across the curve, and clear communication with investors for a $227 million sale.

Solution
Baird partnered closely with Harris County and its Municipal Advisors to prepare the market and position the transaction for a successful sale. The team led targeted pre-marketing efforts to reinforce investor familiarity with the County’s credit, highlighting the strength of the HCTRA system and the strategic purpose of the refunding.

Baird also collaborated with the County to refine the structure, balancing block size, maturity distribution, and couponing to appeal to a broad set of institutional buyers. Through proactive communication, frequent market updates, and real-time feedback from investors, Baird shaped a pricing strategy designed to capture the available market window. This focused preparation and coordinated approach laid the foundation for a smooth execution on pricing day.

Implementation
The Series 2025A Bonds were structured with a serialized scale from 2026 through 2048, along with two long-dated term bonds in 2050 and 2055. Most maturities, including the 2050 term bond, were offered with 5% coupons, while the 2055 term bond featured a 4.50% coupon below par to broaden investor appeal at the far end of the curve.

Demand on pricing day was especially strong in the long maturities, allowing Baird to reduce yields across the 2029–2048 maturities and in the 2055 term bond by 2 to 6 basis points. Early order strength helped shape the final scale, while modest balances in the 2027–2028 maturities were resolved shortly after the order period. The coordinated efforts across the County, its advisors, and Baird’s underwriting and sales teams resulted in a smooth and efficient execution, with County leadership expressing strong satisfaction with the outcome.

Results & Impact
The refunding achieved the County’s objectives by lowering borrowing costs and strengthening the long-term financial profile of the toll road system. The final structure and investor engagement strategy resulted in favorable yields across the maturity spectrum and positioned Harris County to continue investing in critical mobility and infrastructure priorities.

The successful execution reflects the depth of investor confidence in the HCTRA credit and the County’s disciplined approach to financial management. Through thoughtful preparation and collaboration with Baird, the County secured a cost-effective financing outcome that supports its long-term capital and operational plans.