HJ Sims Successfully Closes on $26.335 million Series 2022 Bonds for Bob Hope School
The Hughen Center, Inc. dba Bob Hope School (“THC”) is a nonprofit corporation that currently operates four charter schools on four campuses in and around Port Arthur, TX. Founded in 1922, the current charter is valid until July 2024, as renewed on June 30, 2014. THC accepts students for grades pre-K through 12 and has total enrollment of 2,380.
THC intends to build additional facilities at its Beaumont Campus as well as remodel the facilities at the recently purchased Baytown Campus, in order to continue serving students and expand to meet demand. With an underlying rating of ‘BBB-‘ from S&P, THC was able to apply for and receive the Texas Permanent School Fund (PSF) guarantee, resulting in an enhanced rating of ‘AAA’ from S&P.
The Series 2022A tax-exempt and Series 2022B taxable Education Revenue Bonds enabled THC to renovate existing facilities, build additional facilities, refinance an outstanding loan and reimburse the school for capital expenditures.
Total bond proceeds of $26,521,530 were used to finance the expansion and renovation project, fund payments toward the PSF Charter Reserve Fund, and pay for costs of issuance. The bonds were structured with a 35-year final maturity, and with a 10-year call option at a par.
During pricing, the THC transaction garnered interest for more than $2.7 million through HJ Sim’s exclusive, Private Wealth Management distribution network. The HJ Sims institutional sales team engaged with more than 50 institutional investors resulting in participation by 13 of those institutions and a 5x oversubscription of available bonds.
An over-subscription of 5x allowed the HJ Sims team to reduce the interest rates during pricing, resulting in a 10-basis point reduction. The tax-exempt bonds had coupons of 5.00%, accompanied by yields ranging from 3.75% to 5.10%. The final 35-year term bond had a 5.00% coupon at a yield of 5.10%.
On November 29, 2022, HJ Sims closed on the $26.335 million Series 2022 Bonds with approximately $2.7 million of the issue purchased by HJ Sims’ Private Wealth Management clients and the remainder purchased by 13 institutional bond funds. THC is now underway with its multi-campus renovations and construction at the new Baytown campus.
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