A municipal utility district near Austin, Texas, issued $19.5 million in bonds to refund previously issued securities and finance upgrades to utility infrastructure.
The bonds, sold by Sunfield Municipal Utility District No. 3, mature between 2025 and 2051, yielding between 3.2% and 4.125%. They received an insured rating of AA from S&P Global Ratings and A1 from Moody’s Investors Service, which upgraded the district’s underlying rating to A3.
“The upgrade to A3 reflects the district’s rapidly growing assessed valuation and nominal improvement of financial position which remains below average on a percentage basis amid limited operational responsibility,” Moody’s analysts wrote.
The utility district is wholly located within the small city of Buda and includes parts of Hays and Travis Counties in central Texas. Buda is one of the fastest growing cities near Austin—itself one of the fastest growing U.S. cities. Buda’s population has more than doubled since 2010, reaching 15,643 in 2021, according to the U.S. Census Bureau. About half of that population lies within Sunfield Municipal Utility District No. 3.
“The City has faced tremendous growth in the past decade, and that growth is anticipated to continue over the next decade,” the Buda city government’s website reads.
The bond proceeds will reimburse a previously issued bond anticipation note and reimburse a developer of district utility infrastructure.
The bonds are binding obligations of the district, payable by property taxes. Following the issuance, the district has $85.9 million in debt outstanding.
UMB Bank, NA won a competitive bid for the bonds. Robert W. Baird & Co, Inc acted as financial advisor.