SBK-Brooks Investment Corp. (No. 6 on the BE INVESTMENT BANKS list with $2.2 billion in senior/co-senior managed issues) completed a $233 million bond financing transaction for the Ohio State University–the largest senior-managed underwriting transaction for the Cleveland-based firm.
As lead manager for the bond offering, SBK underwrote about 50% of the transaction, which included investment banking firms Apex Prior Securities, Fifth Third Securities, McDonald & Co. Investments, NatCity Investments, and UBS Financial Services. The bonds were sold primarily to institutional investors and retail clients (which included alumni and money managers). Proceeds will be used to finance 22 separate campus construction and improvement projects at Ohio State’s student campus including a new dormitory, a new heart hospital, and a new boiler for the school’s power plant.
With this and other recent underwriting deals in the works, which include $100 million for the University of Connecticut, $35 million for Texas Southern University, $35.7 million for Jackson State University, and $14.5 million for Cleveland State University, Eric L. Small, CEO of SBK, waxes positive about his firm’s business outlook. “This is probably our best year ever,” he says. “I think in terms of revenue, we’ll be over 30%.” He estimates co-managed issues to total some $15 billion (compared with last year’s $13.03 billion) and senior/co-senior will probably be “a bit above” last year’s total.
“Even though interest rates have moved higher over the course of the year, debt issuance has still been significant relative to previous years,” explains Small. “Many municipal issuers have had to borrow in order to fund projects. And with revenue declining, borrowing has taken on a larger role in the industry.”