California State Public Works Board – 2013 Series F, G & H

California State Public Works Board
Lease Revenue Bonds, 2013 Series F, G & H
$135,995,000 Series F
$161,115,000 Series G
$163,310,000 Series H

Siebert Brandford Shank served as the book-running senior manager on the $460.42 million State Public Works Board, 2013 Series F-G-H. The 2013 Series F and G Bonds were rated “A2/A-/A-” by Moody’s, S&P, and Fitch, respectively. The Series H bonds were rated “Aa3/A-/A-“. Moody’s conferred a higher rating due to the additional strength of the California State University system’s pledge to make rental payments.

The Series F and G bonds financed various facilities for the Department of Corrections and the Series H financed various buildings at several California State University campuses. The transaction had a one-day retail order period on Tuesday, October 1, 2013 with institutional priced on Wednesday, October 2, 2013.

Capital market conditions leading into the pricing were volatile—“AAA” MMD yields, after increasing by as much as 163 basis points from May 1st through mid-September, declined by as much as 53 basis points after the Federal Open Market Committee held off tapering its bond purchases on September 18. During the week of pricing, investor anxiety was stoked by national headlines over the political stalemate in Washington on the federal debt ceiling and passing the government budget that threatened a default on US treasury securities and a shutdown of the federal government, respectively.

Despite these headline concerns, this SPWB transaction was able to secure nearly $1.2 billion of orders. These positive results were due to a strong marketing effort by all the underwriters —as well as creative couponing and use of serial and “mini-term bonds” to attract both retail and institutional buyers. During the retail order period, the transaction received nearly $260 million of retail orders – 84% of which were generated by Siebert Brandford Shank.

The Bonds were aggressively priced at the tightest spreads to MMD that the SPWB has enjoyed for its lease revenue bonds at least in the last 6 years. As with any aggressively priced transaction, at the end of the order period, this transaction had about $62 million of unsold bonds in the difficult to sale intermediate maturities. The two Joint Senior Managers took the $62 million of unsold bonds into inventory.


  • Series F – serials from 2014 through 2031; term bonds in 2031 and 2033
  • Series G – serials from 2014 through 2033; term bond in 2032
  • Series H – serials from 2016 through 2033; term bonds in 2033 and 2038
  • All-In TIC:     4.207%
  • Average Life:   13.468 years