US city water department issues bonds to fund sewer improvement projects
The Water Services Department of Kansas City in Missouri, US, has issued wastewater revenue bonds at a significantly low interest rate of 2.86%, to carry out up to $75m of sewer improvement projects.
As a part of its $2.5bn and 25-year overflow control programme, the water department will perform sewer rehabilitation works to improve sewage treatment plants, pump stations, sewer force mains, interceptor sewers and storm drainage.
The department will also carry out disinfection work and execute green infrastructure improvement works.
Kansas water department issued the bonds using $44m in remaining authority from the August 2005 election, $24m of the $500m in bonding authority from Question 2 approved by voters in August 2012 and $7m in net premium.
It is estimated that the lower interest rates will help the department to save about $23.7m over the 25-year life of the bonds.
Kansas City's city manager Troy Schulte said, "Water Services was able to take advantage of historically low interest rates to fund much-needed sewer improvement projects, which will serve Kansas Citians for generations to come."
The water department also refinanced $11.605m of outstanding sewer revenue debt, owing to the low interest rates to achieve debt service savings.
The department refunded the bonds at a rate of 1.58%, while the replaced bonds had an interest rate of about 4.36%.
Standard & Poor's and Moody's Investors Service rated the bonds as strong, of high quality and low credit risk.