Lakehaven Water & Sewer District is issuing $71.63 million of water and sewer revenue bonds Wednesday, Sept. 29 to finance ongoing and future capital improvement projects necessary to ensure the efficient and reliable operation of the water and sewer utilities for decades to come.
As part of the bond financing process, the District applied for a bond rating from S&P Global Ratings, a national rating agency that evaluates the creditworthiness of public and private bond issuers.
Following a presentation of the District’s financial and management practices to S&P analysts on Sept. 7, the District was given a rating of “AAA” — the highest financial rating attainable by a municipal issuer.
“The District received the highest bond rating of AAA, a great accomplishment for the District and its ratepayers,” said General Manager John Bowman. “This AAA rating reflects that the District is well-managed and has very strong financial policies and practices in place for the benefit of our ratepayers. Higher ratings translate to lower interest costs, which will save a significant amount of money for the District over the life of the bonds.”
Few municipal utilities in Washington have achieved the high rating, said Board President Ron Nowicki.
“It reflects the sound management of the utility systems and the careful financial and infrastructure planning that has been undertaken over many years by board and staff to ensure that the District is in the best shape possible to provide dependable and cost effective service to our customers,” Nowicki said. “Our staff and consultants have worked very hard on this process and it has certainly paid off.”
During the Sept. 7 conference call with S&P, the presentation team provided information about the District and answered questions from the analysts that covered topics of the District’s management and financial practices, economic growth projections, and long-term infrastructure planning. The team included General Manager John Bowman, General Counsel Steve Pritchett, Director of Finance & Information Systems Morgan Dennis, Accounting Manager Tom Drake, FCS Group (rate consultants), and Senior Vice President of D.A. Davidson & C and bond underwriter Jim Nelson.
The water and sewer revenue bonds were priced on Sept. 14 by D.A. Davidson & Co.
Due to interest from multiple investor groups, the bonds were able to be priced at favorable interest rates, said Nelson.
These bonds, financed over 25 years, the bonds achieved a net interest cost of 2.22% — near the historic lows for municipal bonds with these maturities, Nelson added.
The investor premium the District will receive means that the $71.63 million bond sale will yield an $85 million deposit to the District’s construction fund.