Tallahassee, Florida, sold $181 million in bonds to refund previously issued securities.
The bonds mature between 2025 and 2040, yielding between 2.97% and 3.46%. They pay interest at 5%. The securities received a rating of AA+ from Fitch Ratings and AA from S&P Global Ratings.
The city will use the issuance proceeds to refund bonds that it sold in 2010 and 2017 to improve its water and sewer system.
“The rating reflects our view of management’s robust and forward-looking operational and financial plans and policies that have resulted in sound financial performance that we expect will continue given a history of timely rate adjustments,” S&P analyst Alexandra Rozgonyi said in a press release.
The issuance follows new rules issued in April by the Environmental Protection Agency that require municipal water systems to meet a higher standard on the level of so-called forever chemicals in drinking water. Tallahassee’s water authority has tested all of its water wells and found just one with elevated levels of per- and polyfluoroalkyl substances, according to Fitch. The authority is deciding whether to treat or decommission the well, Fitch reported.
Tallahassee, Florida’s capital city, is home to around 200,000 people. The bonds are special obligations of the city, payable by net revenues from its water and sewer system.
BofA Securities, Inc served as lead underwriter on the issuance, purchasing the bonds for $204.3 million. The price reflected a premium of more than $23 million. PFM Financial Advisors LLC acted as municipal advisor.