Metropolitan Washington Airports Authority – 2013A, B & C

Metropolitan Washington Airports Authority (DC)
Airport System Revenue & Refunding Bonds, Series 2013A, B & C

Siebert Brandford Shank navigates a volatile market with proactive marketing and excellent market execution for MWAA

Siebert Brandford Shank’s senior-managed airport transactions included a general obligation issuance for Clark County’s McCarran International Airport in March and revenue bonds for Metropolitan Washington Airports Authority in June.

As senior manager, we worked with Metropolitan Washington Airports Authority and its financial advisors to create an online investor presentation and broad investor outreach in preparation for this pricing. MWAA had been on a negative outlook by Moody’s for nearly two years and despite strong efforts, Moody’s-based internal financial metrics placed MWAA in the “A1” category.

Due to continuing political and economic stressors, the MMD experienced an unprecedented increase by as much as 60 basis points in the days leading up to the June 27 pricing. In light of this, our underwriter recommended monitoring the market daily to be positioned to take advantage of a potential window of opportunity where rates might suddenly retreat to more stable levels. Siebert Brandford Shank’s sales force continued to actively market the transaction and monitor the market. Wednesday afternoon, June 26, the MMD decreased by up to 22 basis points and investors expressed interest at levels tighter than had been expected a week prior, prompting us to go to market on schedule.

Despite volatile market conditions and many transactions being pulled or downsized, the MWAA transaction proceeded on schedule, June 27. Given the strong and diverse investor interest, and despite Moody’s low rating, spreads were tightened to historic levels. In total, $1.2 billion in orders were placed of which Siebert Brandford Shank placed $898.5 million (73% of total).

The pricing directly followed the State of Illinois $1.3 billion GO transaction senior-managed by our firm on Wednesday, June 26. These two sales helped to “bring back” and stabilize the market.

MWAA achieved a 4.67% all-in TIC on the new money and $13.66 million of present value savings or 6.81% of refunded par.