City of Los Angeles Wastewater System, Series 2013-B

City of Los Angeles
$293,860,000
Wastewater System Revenue Bonds,
Series 2013-A & Refunding Series 2013-B

Highly successful transaction despite extremely turbulent market

The City of Los Angeles Wastewater System Revenue Bonds sold on June 4, one of the most difficult weeks in the municipal market of 2013, and which included a large MMD sell-off, widening spreads, and several undersold transactions, due to concerns over the Federal Reserve cutting back its bond-buying program.

The City of Los Angeles Wastewater System Revenue Bonds sold on June 4, one of the most difficult weeks in the municipal market of 2013, and which included a large MMD sell-off, widening spreads, and several undersold transactions, due to concerns over the Federal Reserve cutting back its bond-buying program. Despite this, the underwriting team was able to sell all of the City’s Series 2013 Senior Lien Bonds at highly competitive short- and long-term spreads. In total, we received $558 million in orders with 80% generated by Siebert Brandford Shank. The overall attractive yields allowed for the refunding of $100.5 million of the Series 2003B Bonds and $58.0 million of the Series 2005A Bonds at a total present value savings of $18.9 million (11.98% of refunded par). The City realized gross savings of $24.9 million and was able to reduce near-term debt service by $1.4 million a year. The City also was able to fully back-load its new money bonds at an All-in True Interest Cost (TIC) of 4.38%. In total, the City’s transaction resulted in a combined All-in TIC of 3.97% and achieved an arbitrage yield of 3.23%.