Students Get Front-row Seat to Frisco ISD Bond Pricing

Apr 30, 2019

Students Preparing for the Live Bond Issuance.Wells Fargo and Frisco ISD financial advisor Brian Grubbs brought the municipal bond market to the Career and Technical Education Center to give students a front-row seat to this year's bond issuance.

Frisco ISD issues bonds, which are approved by voters and sold at the discretion of the Board, to fund numerous capital projects.

The $278 million of bonds priced on April 24 included $150 million of “new money,” or money to be used for new projects, and another $128 million to refinance bonds that were sold in 2009. The refinancing of 2009 bonds will save the District approximately $43 million dollars in interest costs over the life of the debt.

The bond valuation process balances the theoretical fair value of a bond based on the bond’s value upon maturity. Students learned that the interest rate is priced by trends in the market, economic indicators, market supply and a number of other nuances.

As part of the event, students watched the pricing process first-hand, learned the role of the financial advisor, bond and underwriter's counsel, and engaged in discussion with the lead underwriter.

Brian Grubbs Presents to CTE Students.Julie Barker’s Securities & Investments and Accounting II students have been covering the bond market and were ready to see the lessons come to life.

“I am beyond thrilled that the kids have the opportunity to witness and experience bond pricing right here in Frisco,” Barker said. “As a parent, resident, taxpayer and employee, I’m excited that the kids having the opportunity to see something most people never get to see.”

Students also learned about how the general composition of municipal bond market buyers and what makes a buyer happy. 

Chase Steward, a senior at Heritage High School, was first inspired to learn more after taking Jacqueline Hollowell’s Survey of Business, Marketing and Finance class as an underclassman.

“This experience has allowed me to get insight into how corporations work from the inside,” Steward said. “I want to major in finance and this whole experience shows how Frisco ISD and Wells Fargo really care about the education of future financial professionals.”

Students had the opportunity to learn from numerous professionals and their journey into finance. Frisco ISD financial advisor Brian Grubbs explained the role of the financial advisor, while Jim Perry, Wells Fargo managing director, gave live commentary and explanations on the bond issuance. The District’s bond counsel Sam Gill of McHall, Parkhurst & Horton reviewed bond issuance, bond elections and the authorization process and Jerry Kyle of Orrick explained the responsibilities and due diligence process of underwriters. 

Student Group Photo After Presentation.“I did not realize we would get to learn so much about the different careers within finance,” said Jordan Duzich, a senior at Frisco High School. ”I want to be an accountant and am excited to learn about the importance of communication and the politics behind bond trading. I never would have thought politics and bond trading would go hand in hand and how those two aspects can work together.”

Wells Fargo Securities was excited to usher this bond, which was the largest transaction in Texas and the second largest nationally on that date.

Students learned about the importance of the District credit rating and how this will directly apply to the community around them.

The bonds sold will impact numerous facets of Frisco ISD including technology, security, transportation, renovations and high schools 11 and 12, which are currently projected to open in 2021 and 2022.

“This is the real world applied,” Duzich said. “I found this whole process extremely interesting and I’m thankful we had this great opportunity.”

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