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Solid credit ratings, favorable market conditions lower borrowing costs for sewer utility ratepayers

Summary

Solid credit ratings and favorable financial market conditions continue to benefit ratepayers served by King County’s Wastewater Treatment Division. On Monday, the County secured $105 million in funding at the lowest borrowing cost since the 1960s.

Story

Long-term investments in vital clean-water infrastructure will now cost a little less for King County sewer utility ratepayers.

On Monday, King County’s Wastewater Treatment Division raised $105 million in 30-year sewer revenue bonds to fund improvements and expansions to the regional wastewater treatment system and refinance existing debt. The transaction included $80 million in new funding at an interest rate of 3.53 percent, the lowest since the 1960s, and the refinancing of $25 million in outstanding utility debt in order to lower debt service costs. The refinancing will save ratepayers $3.8 million over the next 8 years.   

"Lowering costs by managing public money wisely frees up funds for other important wastewater services,” said Executive Dow Constantine. “These projects expand wastewater treatment, modernize existing facilities, and help with the cleanup of Puget Sound.”

Earlier this month, Moody’s and Standard & Poor’s affirmed their respective ratings of the utility’s sewer revenue bonds at Aa2 and AA+, citing the utility’s strong management practices, consistent financial performance and the region’s rosy economic outlook.

King County's wastewater utility funds its capital improvement program by selling sewer revenue bonds. Solid bond ratings help the County secure a lower interest rate on the bonds it sells each year to fund its major capital improvement program. The money borrowed is paid back through current and future monthly sewer rates and charges.

Earlier this year, WTD refinanced a record $728 million in outstanding bonds that will save its ratepayers nearly $160 million over the next 33 years—the largest savings in the County’s history for a bond refinance.

The utility is more than halfway through a 30-year comprehensive plan adopted by the King County Council in 1999. Major projects completed under the plan to date include the $1.8 billion Brightwater Treatment System Project as well as new and upgraded pump stations, projects to control combined sewer overflows, and several pipeline expansion and replacement projects.

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

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