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Arkansas Issues $109 Mln in Water Bonds

By Munichain News Desk

The Arkansas Development Finance Authority sold $109 million in bonds to fund loans which finance clean water projects.

The bonds mature between 2024 and 2043, yielding between 2.93% and 3.78%. They pay interest at 5%. The securities received a rating of AAA from Fitch Ratings and AAA from S&P Global Ratings.

Modeling “demonstrates that program resources are sufficient to withstand hypothetical pool defaults… without causing an interruption in bond payments,” according to Fitch.

The issuance comes as states across the country implement the Infrastructure Investment and Jobs Act, also known as the bipartisan infrastructure law, which includes $50 billion for U.S. drinking water and wastewater systems. The bond proceeds will fund loans to local water and sewer districts that support clean drinking water and wastewater projects.

The investment could help reduce contaminants in Arkansas water. The Environmental Working Group, which studies drinking water pollution, found contaminants in 619 of the 686 drinking water utilities in the state—a roughly similar proportion to the national average. The group found only seven utilities, serving 15,000 people, whose water contained contaminants above legal limits.

The bonds are special, limited obligations of the authority, payable by pledged revenue from local water and sewer systems in the state.

Stephens Inc, Crews & Associates Inc, and Raymond James & Associates Inc served as underwriters on the issuance, purchasing the bonds for more than $120 million. The price reflected a premium of $11 million.

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