Bond Buyer announces finalists for 2023 Deal of the Year

BY SourceMedia | MUNICIPAL | 11/15/23 08:01 AM EST

The Bond Buyer announced the recipients of its annual Deal of the Year awards, marking the 22nd year it has recognized outstanding achievement in municipal finance.

Winners have been named in 10 categories: one in each of The Bond Buyer's five regional areas of coverage, along with five in additional categories. All award winners will be honored at a ceremony at Guastavino's in New York City on Dec. 5 and are also finalists for the national Deal of the Year award, which will be announced at the close of the gala.

The Bond Buyer's editorial board considered a range of factors when judging entries, including: creativity, the ability to pull a complex transaction together under challenging conditions, the ability to serve as a model for other financings, and the public purpose for which a deal's proceeds were used.

"This year's strong lineup of honorees is reflective of the full range of communities and public purposes this market comprises," said Mike Scarchilli, editor-in-chief of The Bond Buyer. "The deals recognized here embody the creativity and resourcefulness of this industry to navigate through choppy waters, brought to bear on projects that advance the infrastructure and quality of life in the nation's municipalities."

For the 13th year, the Deal of the Year event will also include the presentation of the Freda Johnson Awards for Trailblazing Women in Public Finance. This year marks the ninth in which the organization is honoring two public finance professionals: one from the public sector and one from the private. The 2023 honorees are Megan Kilgore, city auditor of the city of Columbus, Ohio, and Virginia Wong, partner and practice group leader at Nixon Peabody LLP. Additionally, a new honor, the Excellence in Leadership Award, will be presented to Kimberly Lyons, VP-product manager at Moody's Investors Service (MCO).

Along with Wong, Kilgore, and Lyons, whose awards will be presented by Freda Johnson, 12 other honorees from the public and private sectors will be recognized as Trailblazing Women in Public Finance by the Northeast Women in Public Finance at the Dec. 5 gala.

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Here are the 2023 Deal of the Year award winners:

SOUTHEAST REGION
The city of Atlanta's $370 million inaugural issuance of social bonds is the winner in the Southeast. The bonds will fund over 100 infrastructure projects to be delivered by various city departments, and represent an intentional collaborative effort to heavily invest in "equity neighborhoods" across the city. The low-cost financing supports socially and environmentally beneficial projects throughout the city that improve equity, safety, and mobility for its citizens, and help provide a more sustainable community.

MIDWEST REGION
The Midwest winner is a $1.7 billion financing from the city of Chicago and its Sales Tax Securitization Corporation that addressed initiatives related to affordable housing, homelessness support services, environmental justice, and community development. The city embarked on the ambitious plan of finance, which included its first social-designated bonds and a cross-credit refunding tender, after receiving 10 rating upgrades and three positive outlook revisions in recognition of its financial turnaround, including a return to investment-grade rating after nearly a decade.

FAR WEST REGION
In the Far West, the winner is the state of Oregon's $989 million new-money financing for statewide capital funding needs for public safety and emergency preparedness, education facilities and affordable housing. Oregon responded to the unique market environment of sizable mutual fund outflows and heightened retail investor interest by utilizing a number of proactive marketing measures, including offering $1,000 denominations on not just taxable but also, uniquely, on tax-exempt bonds, to drive retail investor participation.

SOUTHWEST REGION
The City Public Service Board of San Antonio, Texas' $737 million financing is the winner in the Southwest. Following the impacts of 2021's Winter Storm Uri, the city authorized CPS Energy to submit a private letter ruling request to the IRS to permit certain extraordinary ? and normally taxable ? working capital costs to instead be financed tax-exempt long-term. The IRS concurred with CPS Energy's analysis, resulting in an exception from certain long-term working capital regulations.

NORTHEAST REGION
In the Northeast region, the winner is the $1.76 billion financing for the PennDOT Major Bridges, Package One Project, which consisted of the design, build, financing, and maintenance of six bridges in critical need of replacement across Pennsylvania. Under an availability-based P3 approach, all the bridges were bundled into a single concession agreement. The deal represented the largest single offering of tax-exempt, private-activity bonds for a surface transportation project.

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INNOVATIVE FINANCING
The Innovative Financing winner is the state of Connecticut for its "CT Baby Bonds" program, a measure to combat systemic poverty by investing directly in children at birth. After the originally planned $600 million GO bond sale was shelved due to funding concerns, the state instead substituted an existing bond reserve fund with surety policy, providing multi-year funding assurance for the program, fully funding the CT Baby Bonds Trust up front, while maintaining its commitment to existing bondholders.

SMALL ISSUER FINANCING
The winner in the Small Issuer category is a $208 million deal from Texas' Greater Texoma Utility Authority which supported the engineering and construction of an industrial wastewater treatment facility and the rehabilitation of an existing water treatment plant in Sherman, Texas, to accommodate the arrival of a massive semiconductor fabrication plant. The GTUA bonds will be repaid with contract payments that are an operating expense of the city's water and sewer system.

HEALTH CARE FINANCING
H. Lee Moffitt Cancer Center's $326 million issuance of cigarette tax allocation bonds to fund a 16-million-square-foot campus in Pasco County, Florida, aims to convene the top minds in cancer research and treatment. On pricing day, the state House of Representatives proposed legislative changes to cigarette tax allocations, causing Moffitt to pull the deal. The issuer and its bond insurer then pivoted to a unique structure that secured the critical funding before the end of Florida's legislative session.

ESG/GREEN FINANCING
The ESG/Green Financing winner is the Massachusetts Development Finance Agency's $232 million offering on behalf of the Boston Medical Center, the first designated sustainability bonds in the U.S. for a not-for-profit healthcare organization. BMC's first deal to come to market in six years, the bonds finance expansion projects at several locations that will accommodate increased numbers of patients and address inpatient needs, improve energy efficiency of facilities, and optimize hospital operations.

PUBLIC-PRIVATE PARTNERSHIP FINANCING
The winner in the P3 category is the redevelopment of Terminal 6 at John F. Kennedy International Airport, which will include critical infrastructure improvement to the airport's roadways. The deal's ultimate structure included over $3 billion of taxable term loans and $435 million of tax-exempt bonds, which were privately placed. The financing for this redevelopment was part of the public-private partnership between the Port Authority of New York and New Jersey and a consortium of investors called JFK Millennium Partners.

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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