MWRA NEWS RELEASE Archive
Massachusetts Water Resources Authority
October 16, 2000
MWRA Bond Rating Upgraded, Saves Money in Bond Deal
MWRA received two rating agency upgrades this week in advance of a $150 million bond sale to fund ongoing water and sewer projects. MWRA successfully conducted the fixed rate bond sale and saved an estimated $180,000 per year by using a concurrent interest rate swap to achieved the desired variable rate debt.
The Standard & Poors rating agency upgraded MWRA senior lien debt from A+ to AA, citing substantial completion of the Deer Island Tr atment Plant, continued progress in financing construction projects at lower-than-anticipated costs, and continued ongoing regulatory compliance.
Moodys Investors Service upgraded MWRAs rating from A1 to Aa3 based on the credit strength of the member communities, substantil reserves, and the local aid intercept provisions of the General Bond Resolution. Both Moodys and Standard & Poors noted the need for future rate increases to support MWRAs growing debt service requirements. The Fitch rating, which had been upgraded to AA- in June was unchanged.
"We are very pleased with the rating upgrades. They show the real financial strength that MWRA has developed over the past ten years by funding reserves, working to reduce operating costs, and exploring a variety of financing tools like todays swap agreement to keep debt service costs down."
Some of the capital projects to be funded by this bond sale include the following projects:
Goldman, Sachs & Co. served as the MWRAs lead bond underwriter. The $150 million borrowing, with final maturities in 2011 yielded a 5.03% all-in interest cost. Seven bidders provided bids on the fixed-to-floating rate swap with a high bid of 4.906% from Merrill, Lynch.