Date: April 2020
Location: Burlington County, NJ
Financing Amount: $76,570,000
Financing Type: Series 2020 A & B
PNC Capital Markets Role: Sole Manager
Just as the Burlington County Bridge Commission was preparing to offer its annual note, the COVID-19 pandemic hit, effectively shutting down the municipal market. The note was critically important, as more than 80% would be used to refund the Commission’s Series 2019 B & D notes that were coming due on April 17, 2020. Plans also called for it to fund roads, bridges and municipal buildings. Under the circumstances, the commissioners were concerned that they would not be able to price the note successfully.
Having marketed the Commission’s annual notes since 2013, PNC’s Public Finance group worked closely with the client to provide support in the form of credit approval, ensuring that PNC could buy the note if the capital markets were still dislocated at the time of pricing.
As unemployment climbed and COVID-19 cases mounted, however, overnight liquidity began to freeze again. Over the course of three days, PNC Capital Markets LLC (PNCCM) engaged with large institutional buyers to try to place the Commission’s transaction, only to watch nearly all liquidity and risk tolerance evaporate.
After days of trying to engage investors, whose attention and cash had been diverted to the corporate market, and right before the note was to be pulled from the capital markets and transitioned into a private placement, PNCCM was able to secure an anchor order of $50 million from a major financial institution. With that anchor order in place, PNC stepped up for the second time and underwrote the remaining balance before ultimately placing it within the investor community.
Commenting on the successful placement, Christine Nociti, JD, CPA, Burlington County Bridge Commission Chief Financial Officer/Treasurer/Compliance Officer, praised the bank’s team. We entered the market front and center this April with a ‘pseudo-custom’ transaction during an unprecedented global crisis. It wasn’t a miracle that brought us to the finish line with great results; it was the team at PNC. The Burlington County Bridge Commission never fails to be impressed with the quality of the bank’s professional staff and services.
Carolyn Havlick, CCFO, CMFO, CPA, RMA, Chief Financial Officer, County of Burlington, added, “During the process, PNC kept the county financing team in the loop with frequent updates that helped manage our expectations. They presented options and scenarios, working with us, not just for us. I was more than impressed with the confident and determined professionals at PNC. They handled the unknown during the pandemic without ever missing a beat.”