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Bond rating boost, refinancing saves $41.2 million for King County sewer utility ratepayers

Summary

Long-term investments in vital clean-water infrastructure will now come with a lower cost for King County sewer utility ratepayers. A credit rating upgrade ahead of a $154.6 million bond refinancing will bring $41.2 million in savings over the next 17 years.

Story

Strong credit ratings and favorable conditions in the financial market continue to benefit ratepayers served by King County’s Wastewater Treatment Division.

On Monday, King County’s Wastewater Treatment Division refinanced $175.6 million in Limited Term General Obligation (LTGO) Refunding Bonds. The refinancing will save ratepayers $41.2 million over the next 17 years.   

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

Last month, 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 utility is nearly two-thirds of the way through a 30-year comprehensive plan adopted by the King County Council in 1999 to ensure regional sewer system capacity keeps pace with population growth. Major projects completed under the plan to date include the Brightwater Treatment Plant, several pump station upgrades, pipeline expansions and replacements, and projects to control overflows of stormwater and sewage during heavy rains. 

Since 2014, King County WTD has refinanced almost $2 billion in outstanding debt that will save ratepayers more than $410 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.