Case Study:City of Winston-Salem

Winston-Salem, North Carolina

The City of Winston-Salem is the fourth largest city in the State of North Carolina. Its financial strength, strong governance and administration, and diverse economy provide for the basis for the City’s AAA general obligation ratings by S&P, Moody’s and Fitch. We have served as financial advisor to the City in connection with all of its financings, planning and debt implementation needs since 2014. To date, we have assisted the City in implementing 11 transactions including public offerings and direct purchase transactions of both tax-exempt and taxable obligations totaling more than $619 million.

Project Overview

Most recently, we assisted the City with the competitive solicitation of commercial lending institutions to provide financing for the current refunding of outstanding certificates of participation as well as $2 million of new money for improvements to the City’s fairgrounds.  The City received four competitive financing proposals with varying interest rate and term structures and selected a 13-year credit facility.

In 2017, we assisted the City with the public offering of $64 million in general obligation bonds via competitive sale. That transaction comprised three series of bonds and Wye River Group worked closely with the City to develop a comprehensive plan of finance (including working with bond counsel to identify those projects that qualify for tax-exempt vs. taxable financing); created a financing timetable and schedule of responsibilities; performed a comprehensive review of the City’s outstanding debt portfolio to assess potential debt service savings opportunities; prepared quantitative bond sizing analysis to facilitate the plan of finance and structure for the financing; provided notification of the impending sale to the credit rating agencies; and, arranged preliminary discussions with officials of the Local Government Commission in preparation for a competitive sale of the bonds.  We also assisted in the review of all bond documents, provided advice relative to pre-sale market conditions, timing and comparable transactions, coordinated with the Local Government Commission and helped the City with its review of bids and the final execution of the financing.

In 2016, we assisted with a limited obligation bond transaction comprised both taxable and tax-exempt bonds totaling $51.825 million and financed the acquisition of City Hall South and improvements to Union Station, Benton Convention Center and the Business 40 Corridor. That transaction, which also refinanced the City’s outstanding Series 2004A certificates of participation, was structured as a negotiated, public offering and Wye River Group played an integral role in the third-party lease negotiations on behalf of the City.

We have also advised the City on all of its water and sewer system financings which have been sold via negotiated, public offering or on a direct bank purchase basis.  For the public offerings, we helped the City prepare for and deliver its rating presentation to rating analysts in pursuit of reaffirmation of its AAA/Aa1/AA+ credit ratings on its water and sewer revenue bonds and analyzed the potential impact to its water and sewer system credit ratings resulting from changes to Moody’s ratings methodology and scorecard.

In addition to routine issuance of general obligation and water and sewer bonds, Wye River has assisted the City in several transactions that called for creative, low cost solutions. For instance, we assisted the City with a $13.25 million limited obligation taxable bond transaction for the acquisition of the BB&T Ballpark. The bonds were sold through a competitive solicitation for direct bank purchased bonds.

Financing Overview

The City of Winston-Salem sought the implementation of a $51.825 million limited obligation bond issue, comprised of both taxable and tax-exempt bonds, the proceeds of which funded the costs associated with the project. This transaction was structured as a negotiated, public offering. The bonds also refinanced the City’s outstanding Series 2004A certificates of participation.

Wye River Group’s Role

Wye River has had the privilege to work closely with the City’s Local Government Commission on several mission critical projects and financings. Our services have included:

  • Developed a financing timetable and schedule of responsibilities
  • Performed comprehensive reviews of the City’s outstanding debt portfolio to assess potential debt service savings opportunities
  • Prepared quantitative bond sizing analysis to facilitate the plan of financing and structure for the financings
  • Provided notification of the impending sale to the credit rating agencies
  • Arranged preliminary discussions with officials of the Local Government Commission in preparation for a competitive sale of the bonds
  • Assisted in the review of all bond documents
  • Provided advice relative to pre-sale market conditions, timing and comparable transactions
  • Coordinated with the Local Government Commission and helped the City with the review of bonds and the final execution of the financings

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