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Bond refinancing, credit upgrade lead to $35.8 million in savings for King County’s sewer utility

Summary

Strong credit ratings and favorable financial market conditions continue to benefit ratepayers served by King County’s Wastewater Treatment Division. The County today refinanced $159.7 million in sewer revenue bonds that will save $35.8 million over the next 32 years.

Story

Infrastructure that protects regional water quality will now come with a lower price tag following a recent credit upgrade and a bond refinancing that will yield $35.8 million in savings over the next 32 years. This stream of savings, when converted into today’s dollars, has a present value worth $19.9 million.

King County’s Wastewater Treatment Division (WTD) today refinanced $159.7 million in sewer revenue bonds at an interest rate of 3.58 percent. 

Solid credit ratings help the county secure a lower interest rate on these bonds.

In September, Moody’s Investor’s Service upgraded the rating on WTD's sewer revenue bonds to Aa1 from Aa2, with a stable outlook. Moody’s cited WTD’s “strengthened financial position, including higher debt service coverage” as reasons for the upgrade. Standard & Poor’s affirmed its AA+ rating, with a stable outlook on WTD’s sewer revenue bonds. These ratings are in the second highest rating category of each agency and indicate high credit quality with low credit risk to investors.  

The money borrowed through bond sales is paid back through current and future monthly sewer rates and charges.

Over the next two years, WTD is budgeting over $400 million on its major capital program to build new facilities and upgrade existing infrastructure. That spending is expected to create over 900 construction jobs, along with several opportunities for contractors and suppliers to bid for contracts.

Since 2014, King County WTD has refinanced almost $2 billion in outstanding debt that will save ratepayers more than $446 million over the life of the bonds. 

Additional information about the utility, its service mission and its finances is available online at http://www.kingcounty.gov/ratepayerreport.