City of Gary (IN)
Special Tax Revenue Bond Anticipation Notes,
In May 2014, Siebert Brandford Shank served as the sole underwriter for this landmark tax-exempt issuance for the City of Gary, which was nominated for The Bond Buyer’s “9th Annual Small Deal of the Year Award”.
This was the City’s first public offering since 1994 and was secured using new special tax revenues generated from riverboat casinos. This pledge allowed the City to preserve its general obligation credit while recovering from the economic downturn. The transaction was one step of several by the City to help rebuild its credit.
Complex Plan of Finance: We worked closely with the City to analyze the use of ratings, and considered the application of ratings from all four rating agencies and the use of bond insurance. We presented a comprehensive analysis to the City indicating that an attractive low-cost interim financing could be achieved on a non-rated basis. The City’s future financing needs were analyzed holistically in order to achieve the varied long term goals for an economically distressed City. The unique investor base, marketing process, revenue constraints, and other requirements involved careful management by the finance team to ensure the structure would not only meet legal and policy requirements but also attract a broad array of buyers at competitive rates. At pricing, the team responded quickly to changing conditions to produce a final structure that achieved the desired debt service profile and low interest rates.
As this was the City’s first public offering since 1994 and a non-rated issue, the team focused heavily on ensuring the disclosure was as detailed as necessary. From a disclosure perspective, as well as garnering investor interest, it was important to provide a clear description of the crux of the security.
Despite the inaugural issuance and unrated credit, we successfully placed the entire issue at levels originally suggested to the market, achieving a TIC of 2.365%.