Additional $25 million raised to support nine capital improvement projects
RIVERSIDE, CA – Western Municipal Water District’s (Western) Board of Directors approved a resolution on Wednesday, June 3, giving staff the green light to refinance two bond series, resulting in more than $9 million in savings on future interest costs.
When the bonds were sold on Tuesday, June 23, investors showed their favorable view of Western by placing more than $740 million in orders, representing eight times the amount of available bonds. This high demand allowed Western to reduce the bond yield received by investors, resulting in substantial interest savings for Western and its customers.
“Western prides itself in using customer revenue responsibly while continually looking for new ways to strengthen Western’s financial position,” explained General Manager Craig Miller. “This move will lower costs on our debt to bring long-term benefit to Western’s customers.”
Fueled by high investor demand and Western’s recent credit rating upgrade to AA+ (positive outlook) by Fitch Ratings, the interest cost of the refinanced debt will be only 2.3 percent. This remarkably low percentage means millions will be saved over the long run in debt service payments.
To take advantage of issuance cost and time efficiencies, Western moved forward with a combined approach that both refinanced existing bonds and issued new debt to raise $25 million to pay for nine major capital projects. These projects will increase service reliability and ultimately bring more construction jobs and other economic benefits to the region.
The new bond issued supports Western’s strong asset replacement program that continually protects the integrity of its pipes, pumps, and treatment systems to ensure water delivery is not interrupted due to equipment failure.
“While COVID-19 concerns continue to weigh heavily on investors, the municipal bond market is experiencing increasing investor demand for high-credit, quality bonds like those of Western’s,” said Assistant General Manager/Chief Finance Officer Rod LeMond. “Western regularly seeks out financing options that help maintain and enhance our systems so that our customers continue to receive the highest quality water and sewer services, today and for future generations.”
For more information about Western’s finances, budget and investments, visit Western’s website at wmwd.com/Finance or call 951.571.7100.
Western Municipal Water District is one of the largest public agencies in Riverside County, providing water and wastewater (sewer) services to nearly a million people, both retail and wholesale customers who live, work, and play within 527-square miles in one of California’s most populous regions. Learn more: wmwd.com.