SECOND ROUND SALE OF SFPUC REVENUE BONDS TO FUND WATER SYSTEM SEISMIC UPGRADES, IMPROVEMENTS
California Desk
September 04, 2009
San Francisco, CA—Mayor Gavin Newsom today lauded the San Francisco Public Utilities Commission (SFPUC) sale this week of water revenue bonds to fund much-needed seismic and other improvements to the Hetch Hetchy regional water system. While originally planned as a $375 million issuance, favorable market conditions resulted in the SFPUC yielding nearly $434 million at a very attractive 4.54% interest rate due to heightened demand and investor willingness to pay a premium for its high-quality, water bonds.
Among the seven major institutions that competed Tuesday for the San Francisco Water Revenue Bonds, 2009 Series B, the winner was JP Morgan. When combined with the Series A sale earlier this summer, the two sales will result in annual savings of $1.9 million, or a total 30-year ratepayer savings of $58 million.
"This second highly successful bond sale and the increased interest shown by so many global institutional investors is a resounding vote of confidence in San Francisco´s program to rebuild our regional water system and the financial stability of the SFPUC," said Mayor Newsom.
The bond proceeds will fund projects within the SFPUC´s $4.6 billion voter-approved Water System Improvement Program (WSIP), a program of 85 projects to seismically upgrade and improve the regional Hetch Hetchy water system´s tunnels, pipelines, dams and treatment plants. The voter-approved revenue bonds are rated AA- by Standard & Poor´s and A1 by Moody´s Investor Services. They are by backed by water revenues from the SFPUC´s 2.5 million Bay Area ratepayers, including retail customers in San Francisco and 27 wholesale customers in San Mateo, Santa Clara and Alameda Counties.
"This week´s sale exceeded our expectations in terms of total funds raised and interest rate," said SFPUC General Manager Ed Harrington. "It´s great news for our ratepayers, great news for individual investors and great news for our efforts to seismically upgrade and rebuild our water system before the next major earthquake."
Among the seven major institutions that competed Tuesday for the San Francisco Water Revenue Bonds, 2009 Series B, the winner was JP Morgan. When combined with the Series A sale earlier this summer, the two sales will result in annual savings of $1.9 million, or a total 30-year ratepayer savings of $58 million.
"This second highly successful bond sale and the increased interest shown by so many global institutional investors is a resounding vote of confidence in San Francisco´s program to rebuild our regional water system and the financial stability of the SFPUC," said Mayor Newsom.
The bond proceeds will fund projects within the SFPUC´s $4.6 billion voter-approved Water System Improvement Program (WSIP), a program of 85 projects to seismically upgrade and improve the regional Hetch Hetchy water system´s tunnels, pipelines, dams and treatment plants. The voter-approved revenue bonds are rated AA- by Standard & Poor´s and A1 by Moody´s Investor Services. They are by backed by water revenues from the SFPUC´s 2.5 million Bay Area ratepayers, including retail customers in San Francisco and 27 wholesale customers in San Mateo, Santa Clara and Alameda Counties.
"This week´s sale exceeded our expectations in terms of total funds raised and interest rate," said SFPUC General Manager Ed Harrington. "It´s great news for our ratepayers, great news for individual investors and great news for our efforts to seismically upgrade and rebuild our water system before the next major earthquake."
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