Press Release

Jul 17, 2018

Janney's Public Finance Team Acts as Senior Manager in Construction of New Pennsylvania High School

As enrollment in the Springfield School District (the “District”) in Delaware County, Pennsylvania steadily increased over the past five school years, it became clear that the District needed upgraded spaces. The District currently educates more than 4,000 with projections to increase the student body nearly 7% in the coming years.

Often, schools choose to undergo major renovations instead of building new facilities due to challenges with zoning issues and the community, determining where children will go to school while the construction is being done, and potential property tax implications to residents. Springfield High School made a different choice, with the help of Janney, and decided to break ground on a newly constructed high school.

“The new school will make Springfield a more desirable place to live, since a large part of property taxes are allocated for the local school district,” said Charles Mathews, Managing Director, in Janney’s Public Finance Department. “In addition to providing an improved environment for children to go to school, it should also spur further economic growth and raise property values, as people will want to move to an area with a strong school district comprised of outstanding facilities and resources for their children.”

Springfield High School was originally constructed in 1953 and has had several additions and renovations over the past 65 years, but the District ultimately determined that building a new high school facility would be more cost effective and safer for students than another renovation project. In an era of school safety being a paramount issue, the new Springfield High School will include only ten doors and access points versus the 42 that it has today.

Janney was pleased to be selected as a Senior Manager on this project, after responding to a request for proposals in April, 2018 for $40,000,000, which was secured by a general obligation pledge of the Springfield School District. This $40,000,000 transaction is the second of three planned borrowings, totaling $130 million.

“When the transaction was brought to market, pricing on municipal yields rose as much as seven basis points,” said Charles. He continued, “At the same time, the 10-year treasury yield reached 3.08%, the highest yield the market has witnessed since mid-2011, as concerns about inflation and the pace of federal rate hikes increased. While 70% of the maturities were filled or oversubscribed, Janney underwrote a balance of approximately $3 million in order to maintain its aggressive pricing on the entire transaction.”

Janney is a well-positioned regional firm with a strong institutional and retail distribution network that is able to serve middle market clients, such as Springfield School District. Charles said, “We have true individual investors that value tax-exempt income in their investment portfolios. Tax-exempt municipal bonds are the largest asset class held at the Firm and a staple investment for retail investors. The after tax return on municipal bonds, coupled with their strong credit quality, make them a very attractive investment relative to other fixed income assets.”

“While Janney is in the business of underwriting and selling bonds for our clients, a rewarding ancillary by-product is that we help to finance capital projects for local municipalities, which serve to enhance where their residents live, work, and play,” said Charles. “It’s always nice to see the end product of what we’ve helped finance. Springfield High School is a great example of that.”

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