As part of our platinum corporate partner profile series, Fast Growth School Coalition’s Dr. Greg Smith recently sat down with Ryan O’Hara, Head of Texas Public Finance with Huntington Capital Markets to talk about Huntington’s work in Texas, its relationship with fast growth districts and their support of our FGSC coalition. 

Texas K-12 financings are a Huntington Capital Markets specialty. Since 2009, HCM has served as underwriter on approximately 220 Texas school district transactions, totaling $10.3 billion in par amount. Our Texas bond underwriting/commitment desk and dedicated professionals, combined with our overall public finance experience and exceptional ability to underwrite and distribute Texas K-12 municipal bonds, makes HCM uniquely qualified to serve as an underwriter for FGSC districts’ bonds.

Dr. Smith: How important is it to your business to connect with fast-growth school districts and what sets HCM apart in your industry?

O’Hara: What distinguishes HCM from our competitors is our in-depth coverage of second- third- and fourth-tier institutional investors throughout the nation, providing access to underserved investors, potentially expanding a district’s investor base and driving down interest cost. This focus incorporating Tier II, III and IV investors distinguishes HCM’s distribution capabilities when compared to our regional and “peer” group competitors and provides our clients access to the broadest range of investors –facilitating our efforts to optimize pricing results, which is a vital part of FGSC districts’ tax rate management efforts.

                             
¹ Huntington Capital Markets® is a federally registered service mark and a trade name under which the investment banking products and services of Huntington Bancshares Incorporated and its subsidiaries, Huntington Securities, Inc. and The Huntington National Bank, are marketed. Securities products and services are offered by licensed securities representatives of Huntington Securities, Inc., registered broker-dealer and member, FINRA and SIPC. Banking products and services are offered by The Huntington National Bank, Member FDIC. Investment products are: NOT A DEPOSIT • NOT FDIC INSURED • NOT GUARANTEED BY THE BANK • NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY • MAY LOSE VALUE
                             

Dr. Smith: What challenges do you see facing Texas public school districts and fast growth districts in particular? 

O’Hara: The FGSC destination districts will continue to be challenged to provide facilities for increasing enrollments within property tax rate constraints from citizens and the Texas Legislature

Dr. Smith: Why does Huntington Capital Markets choose to support the Fast Growth School Coalition?

O’Hara: Serving the students and communities served by the FGSC is consistent with Huntington’s Purpose of looking out for people.

HCM strongly believes that our Texas bond underwriting/commitment desk and dedicated professionals, combined with our overall K-12 public finance experience and expert ability to underwrite and distribute municipal bonds, makes HCM uniquely and highly qualified to serve as an underwriter for fast growth school districts.

Dr. Smith: What do you see as the biggest challenges and greatest opportunities facing public education and fast growth schools today?

O’Hara: Preparing the future workforce Texas needs is the biggest challenge facing Texas school districts. The fast growth school districts are uniquely situated to meet this challenge because they have the population size to most economically provide the learning opportunities, assess goal attainment and adapt to ever-changing employer expectations. 

Dr. Smith: Tell us a little about your work with fast growth districts. Is there a recent case study or project you could share with us?

O’Hara: Yes, a recent offering for the Katy Independent SchoolDistrict is one such example. Pricing was scheduled for Wednesday, November 17, 2021, which coincided with another PSF transaction pricing. The Katy ISD bonds had a barbell structure with a large maturity due a few months after closing and ascending debt service out for 30-years. During premarketing we were able to come up with three pricing strategies.

The shortest maturity, 2022, was 11 times oversubscribed. Other than the 2022 maturity, the maturities on the short end saw lower traction. The maturities after the call date saw extraordinary demand from a diverse set of buyers. The pricing experienced subscription levels between 9 and 17 times oversubscribed, receiving more than $1.2 billion in total orders.

HCM was able to lower yields, in some places as much as 13 basis points (0.13%), to reduce the oversubscription levels to 7 times oversubscribed resulting in significantly lower borrowing cost to Katy ISD when compared to the preliminary pricing.