The District of Columbia Water and Sewer Authority sold $506.4 million in bonds to refund previously issued securities.
The bonds mature between 2025 and 2044, yielding between 2.92% and 3.63%. They pay interest at 5%. The securities received a rating of AA from Fitch Ratings, Aa2 from Moody’s Investors Service, and AA+ from S&P Global Ratings.
The rating reflects “the authority’s very strong financial profile in the context of its very strong revenue defensibility and operating risk profile,” Fitch analysts wrote.
The authority will use the issuance proceeds to finance a tender offer for previously sold bonds. On June 20, the authority submitted a tender offer to bondholders for series sold between 2015 and 2022.
It will also use the proceeds to refund bonds that it sold in 2014.
DC Water and Sewer provides services to some 700,000 residents of the U.S. capital city. The bonds are special, limited obligations of the authority, payable by a subordinate lien on net water and sewer system revenues.
Morgan Stanley & Co LLC served as lead underwriter on the issuance, purchasing the bonds for $572.2 million. The price reflected a premium of $67.6 million and a discount of $1.8 million. PFM Financial Advisors LLC and Sustainable Capital Advisors acted as financial advisors.