A California Hospital
When the time comes for the public offering of your bonds, how will you know if the pricing suggested by your underwriter is as aggressive as it should be?
Situation:
Client: California hospital, Rated A3/A-/A-; Proposed $200 million bond issue
- The California bonds were to be priced the day after Ponder priced the Illinois bonds
- We know that California bonds should outperform Illinois bonds due to double tax exemption
- We negotiated lower yields for the initial order period to position the transaction to take further reductions while in the market
- The final oricing resulted in lower yields, consistent with Ponder's proposed scale, and saved our client over $2.4 million
| Maturity |
Comparable Transaction - Illinois Hospital |
Original CA Scale Proposed by Underwriter |
Scale Proposed by Ponder & Co. for CA Issue |
Order Period CA Scale Proposed by Underwriter |
Ponder Negotiated Final Pricing On CA Bonds |
Present Value Savings for Client |
| 2023 |
5.58% |
5.55% |
5.45% |
5.50% |
5.45% |
$996,500 |
| 2033 |
5.70% |
5.70% |
5.60% |
5.65% |
5.60% |
$1,447,660 |
| Total PV Savings $2,444,100 |
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