King County, Washington, issued $392.6 million in bonds to finance improvements to its sewer system.
The bonds mature between 2025 and 2055, yielding between 2.85% and 3.91%. They received a rating of Aa1 from Moody’s Investors Service and AA+ from S&P Global Ratings.
The rating reflects the county sewer system’s large service territory and “incorporates the system’s seniority in the flow of funds relative to a typical municipal retail service provider,” Moody’s analysts wrote.
King County, which includes Seattle and its eastern suburbs and is the largest in Washington, will use the proceeds to fund its sewer system’s capital improvement plan. The plan calls for some $8.2 billion in expenditures over the next decade, according to the official statement accompanying the sale of the bonds.
Earlier this year, King County committed to investing $10 billion over the next ten years to reduce pollution in local waterways, repair aging infrastructure, and build new infrastructure that is resilient to climate change.
Some of that funding will come from federal coffers. In March, it won a $500 million loan from the U.S. Environmental Protection Agency to fund 14 projects that improve water quality.
The county will also use the bond proceeds to refund sewer bonds that it sold in 2014.
The bonds are special limited obligations of King County, payable by net revenue from its sewer enterprise.
BofA Securities, Inc served as lead underwriter on the issuance, purchasing the bonds for $445 million. The price reflected a premium of $53 million. Piper Sandler & Co acted as municipal advisor.