$271,000,000 Weld RE 4 General Obligation Bonds, Tax-Exempt Series 2023

Transaction Summary

On January 24, 2023, RBCCM served as Sole Manager for Weld RE 4 School District (District) General Obligation Bonds, Series 2023.  Proceeds of the Bonds are being used to fund capital projects described under the District’s Capital Plan and approved in the 2022 ballot question.

Summary of Terms 

Issuer Overview

The District is located in the northern portion of the State of Colorado (State), approximately 60 miles from the City of Denver, eight miles south of the City of Fort Collins, 12 miles west of the city center of the City of Greeley, and eight miles northeast of the City of Loveland.  The District encompasses approximately 100 square miles, including the Town of Windsor, the Town of Severance, a small portion of the City of Greeley and portions of unincorporated Weld County.  The District’s fall 2022 enrollment was 8,229 students and represents one of the faster growing school districts in the State at that time with over 22% growth in enrollment in the  four years leading up to the bond issuance.

Plan of Finance

Weld RE 4 School District has been an RBCCM client since 2014 and represents one of the faster growing school districts in Colorado over that period, with over 22% enrollment growth in the  years 2018 to 2022.  The District expects to see a continuing need for new facilities as enrollment growth is forecasted to continue.  The District’s assessed value is centered in oil and gas and fluctuates substantially, making it a challenge to project tax impacts and debt capacity from year to year.  In preparing for the 2022 election, RBCCM worked with District personnel to forecast debt service capacity and projected tax impacts.  Recent large increases in assessed value, due primarily to oil and gas, allowed the District to issue the full $271 million of general obligation bonds with a significantly lower tax impact than projected in the planning process that led up to the November 2022 election.  After a successful election, RBCCM and the District entered the market in early 2023.

Marketing and Pricing

Given the constructive tone and positive initial investor feedback, the underwriting desk compared recent Colorado K-12 transactions for pricing.  RBCCM pre-marketed several couponing structures in order to satisfy the District’s need for maximum allowable premium.  The agreed-upon structure was a large term bond with a mix of serial maturities, which attracted several key institutional buyers.  At the end of the order period, the issue was oversubscribed with over $1.2 billion in orders from more than 40 unique investors, and repricing moves during the process were able to generate additional premium for the District’s Project Fund.  Ultimately, RBCCM’s pricing and marketing allowed the District to achieve a total Project Fund of more than $308 million with a total interest costof 3.75%.