Case Study

City of McAllen, Texas

 

$38,490,000 General Obligation Refunding Bonds, Taxable Series 2021

Estrada Hinojosa participated in a $38,490,000 City of McAllen, Texas – General Obligation Refunding Bonds, Taxable Series 2021 deal as Senior-Managing Underwriter. Proceeds from the sale of the bonds would be used to refund a portion of its outstanding debt to lower the City’s total debt service. Three days prior to the expected pricing date, the State of Texas was hit with power outages stemming from severely inclement weather that struck the South and Midwestern United States. While multiple underwriting deals were postponed, Estrada Hinojosa implemented its Business Disruption Plan and was able to proceed with the negotiated sale of the City’s bonds as planned.

Our Underwriting and Sales Desk was able to captivate the attention of an array of investors eager for municipal debt at a time of low supply. As a result, Estrada Hinojosa substantially lowered the yield on various maturities reducing the cost of borrowing and delivering $3,233,409 in net present value savings to the City of McAllen. Had the pricing been delayed until the situation had improved, the City would not have benefited from the low interest rate environment of that week as treasury rates have increased substantially.