November 18, 2015, Omaha, Neb.—Metropolitan Utilities District (M.U.D.) successfully completed a $189 million Series 2015 water bond issuance yesterday.
“We are very pleased with the financial results of this 2015 Bond Issuance. The favorable terms are beneficial to the District and our customers. The all-in cost of funds is 2.96 percent. This bond issuance allows the District to refund and refinance the Platte West Water Treatment Plant bond issues from 2006 at a more favorable interest rate, which will save the District $16.4 million over the life of the financing,” said Senior Vice-President and Chief Financial Officer Deb Schneider. “In addition, $41 million of the bond issuance is new debt that will be used to fund capital improvement projects at our Florence Water Treatment Plant over the next three years.”
In 2010, the District developed a 20-year Florence Capital Improvements Plan, which includes approximately $175 million in regulatory, performance, water quality and condition improvements at the 126-year-old facility.
Prior to the bond issuance, M.U.D. received updated ratings from Standard & Poor’s Ratings Services and Moody’s Investors Service. S&P assigned a rating of “A+” to the District’s 2015 Bond Issuance with a positive outlook, an upgrade from its previous “A” rating. Moody’s affirmed the “A1” rating with a stable outlook for the District.
“Both our Board of Directors and management were pleased with the upgrade from S&P,” Schneider said.
S&P stated in their release, “The upgrade reflects our view of the improvement in the District’s finances, which we currently consider strong and expect to be sustained at similarly strong levels for the next two years. All-in debt service coverage improved to a strong 2.16x in fiscal 2014 and projections indicate it will remain above 1.5x for the next two years. Within the two-year outlook horizon, we could raise the rating if the District sustains its financial metrics, enabling it to improve and maintain liquidity at levels we consider strong and in line with a higher rating.”
Schneider added, “The low interest rate we received for this bond issue is a result of the District’s commitment to strengthening the financial position of the Water Department, including increased focus on operational efficiencies and cost reductions, along with managed growth of our reserves. We believe that future bond financing, coupled with execution of our strategic plan will allow the District to incur only moderate rate increases for the foreseeable future to continue with the Florence Capital Improvement Plan and build necessary reserves.”
To access the District’s financial reports, go to: About Us
M.U.D. provides safe, reliable, and cost-effective natural gas and water services to our community. We serve safe drinking water to more than 207,000 customers in the metropolitan Omaha area and maintain more than 27,000 hydrants for fire protection. As the fifth largest public gas utility in the United States, we also serve natural gas to more than 223,000 customers. We are a public utility and proud to be customer-owned. The District is governed by a board of seven directors, elected by our customer-owners. Visit www.mudomaha.com for the latest alerts and information.