The Ohio Water Development Authority sold $250 million in bonds to finance wastewater improvements in local municipalities across the state.
The bonds mature between 2033 and 2045, yielding between 2.89% and 3.66%. They pay interest at 5%. The securities received a rating of Aaa from Moody’s Investors Service and AAA from S&P Global Ratings.
The authority will use the bonds to support its Drinking Water Assistance Fund Program, which involves loaning the proceeds from the issuance to municipal water systems throughout the state.
“The Aaa rating reflects that the program will continue to maintain [a] high level of overcollateralization and favorable loan pool characteristics,” Moody’s analysts wrote.
The Ohio Water Development Authority more than $1.4 billion in outstanding loans to local water systems. The largest borrower is the city of Columbus, the state capital, which has taken on more than $600 million in loans from the authority to fund wastewater upgrades, according to the official statement accompanying the sale of the bonds.
Columbus could soon borrow even more. In May 2024, the city released a capital improvement plan indicating “significant” needs and a preference to finance those needs through the authority, which has not yet approved loan agreements under the plan.
The bonds are special obligations of the authority, secured by borrower loan repayments.
Stifel, Nicolaus & Company, Inc served as lead underwriter on the issuance, purchasing the bonds for $284.1 million. The price reflected a premium of $35.1 million and a discount of $1 million. PFM Financial Advisors LLC acted as municipal advisor.