High Point is not just another large construction site. The development covers 355 acres and will eventually contain PepsiCo buildings totaling 2.3 million square feet, along with 12 hotels, 750 homes, and space for retail, industrial, commercial, and dining.
The anchor tenant is what makes all of that possible. Westside Investment Partners, the private developer behind High Point, says PepsiCo also intends to roughly double its local footprint by adding warehouse and manufacturing capacity later.
That scale matters, because the whole project is financed through itself. The stronger the development is, the stronger the tax base is, and the tax base is what pays off the debt.
A special district is a small public body created for one job: borrow money now, collect taxes and payments from the land later.
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Land-secured bond deals like this are common in Colorado. What is not common is the amount. Shannon Rinehart, co-head of municipal investments at Columbia Threadneedle Investments, says similar transactions typically run from $20 million to $50 million.
The debt also has two layers with different risk. The $156 million portion comes with an insurance policy from Assured Guaranty and holds an insured AA rating. The other $44 million is unrated and sits in a subordinate-lien position, which means the larger piece gets paid first if the project hits trouble.
Rinehart says that split is intentional. "It really benefits everybody if issuance structure, ratings and maturity match up with where investor demand is," she said. "Providing the subordinate-lien along with the insurance really enables the bulk of this issuance to be high quality, so that's going to mean cheaper financing for the district, and it should mean an increased breadth of investors that will be interested in investing."
The sale, which Piper Sandler will underwrite, is expected to price on August 20.
A single bond deal can actually be two very different investments at the same time. The $156 million insured part looks like a typical safe municipal bond. The $44 million uninsured part is the kind of paper that ends up in a higher yield bond fund, with more risk and potentially more reward.
None of that is a warning. Rinehart says there is plenty of appetite for that riskier slice. As she put it, "as long as deals are fundamentally sound, there is a lot of investor appetite in the high-yield market, and $44 million is a very digestible size."
August 20, the day the bonds are scheduled to price, will show whether investor demand actually matches that expectation.
For regular people, the lesson is simpler. The word "municipal bond" does not tell you how safe or risky something is. A bond can be insured, rated AA, and paid first, or it can be unrated, subordinated, and paid last.
Same project, same day, same sale. The label is only the beginning of the story.
A project anchored by a beverage plant shows the power of consistency, exactly what the free Always Be Buying E-Book teaches