BOND PROGRESS UPDATE: Demand high for MISD bond investment

Bond Progress Update

High investor demand for MISD bond pushes interest rate lower

30-year bond finalizes at 4.09%

March 6, 2024 — The first of two bond offerings from 2023’s successful Midland ISD bond election hit the market Tuesday, and investors were eager to buy in.

The interest rate for the Series 2024 bond is 4.09%, paid semi-annually. It was anticipated during planning that the bond would have a rate of 5.25%; however, incredibly high demand from investors pushed the rate down.

In the first 30 minutes, there were twice as many orders than what was available. After 90 minutes, that figure rose to 5.6 times “oversubscribed.”

“There were 130 different investors who placed orders, which speaks highly of the district's credit rating and recognition in the market,” said Tucker Durham, MISD Chief Financial Officer.

Residents in Midland and Ector counties received first priority. 

The Series 2024 bond amount is $873,930,000, has a 30-year term and was given an Aaa rating by Moody’s and AAA by S&P. Raymond James was the senior underwriter. Other underwriters were Frost Bank, BOK Financial, Baird, FHN Financial and Estrada Hinojosa.

The bonds are structured for a 30 year repayment, which is what the bond planning was based around. Assuming the bonds are paid to maturity, and no early payments or refinancing takes place, the estimated overall cost is $310 million less than originally estimated during the bond planning process.

The second offering is anticipated for 2026. 

MISD holds an Aa1 bond credit rating from Moody’s, which recently improved its outlook to “positive” from stable. S&P rates the district AA. MISD also carries a AAA rating from the Texas Permanent School Fund.

In November, voters approved a $1.4 billion school bond that will include the construction of new Midland and Legacy high school campuses, construction of a new elementary school in the Lone Star Trails area of Midland, safety and security upgrades, and improvements to aging facilities districtwide.

More Information

Stay up to date with the progress of executing the bond at midlandbond2023.com.

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Media Relations Contact:
Trevor Hawes
Communications Specialist
432-240-1044 | trevor.hawes@midlandisd.net