Comer Capital Group helps Gary Sanitary District save money through the issuance of one of the Region’s first Cinderella Bonds
On January 30, 2020 the Gary Sanitary District issued one of the Region’s first convertible bonds, also known as a “Cinderella Bond,” to refund its Series 2011 revenue bonds. This “Cinderella Bond” structure allowed the bonds to be issued on a taxable basis during the first two years (until the bonds are callable) and converted to tax-exempt for the remainder of its term, therefore increasing the amount of savings. The initial purpose of the Series 2011 revenue bond was to provide funds for labor, construction, rehabilitation, and sewer improvements in the Sanitary District.
Upon the issuance of the Series 2020 Convertible bonds, the district simultaneously prepaid its Series 2013 Bonds, which further reduced the interest expense of GSD and reduced its outstanding debt by $2,940,000. The issuance of the Convertible Gary Sanitary District Refunding Revenue Bonds resulted in a net present value savings to GSD of $1,760,753. The Cinderella Bond structure was put in place by GSD’s Municipal Advisor, Comer Capital Group, LLC and Bond Counsel, Taft Stettinius & Hollister LLP. Piper Sandler served as Placement Agent on the transaction.