The New York State Environmental Facilities Corporation sold $717.3 million in bonds to finance improvements to New York City water.
The bonds mature between 2025 and 2053, yielding between 2.56% and 3.87%. They received a rating of AAA from Fitch Ratings, Aaa from Moody’s Investors Service, and AAA from S&P Global Ratings.
The authority will use the bond proceeds to “provide financial assistance” to the New York City Municipal Water Finance Authority (NYCMWFA), which is tasked with maintaining the quality of the drinking water in the largest U.S. city.
The rating “primarily reflects the very strong credit quality of the NYCMWFA,” Fitch analysts wrote.
The NYCMWFA will use the issuance proceeds to “finance or refinance the costs of certain water pollution control projects and drinking water projects,” according to the official statement accompanying the sale of the bonds. The issuance will also refund previously issued securities.
The bond sale is the latest effort to improve water facilities in New York City. Last December, New York Governor Kathy Hochul announced that the state would award NYCMWFA with $6 million in funding to improve water quality in the Bronx River.
The bonds are special limited obligations of the Environmental Facilities Corporation, secured by repayment obligations by the NYCMWFA.
Jefferies LLC served as lead underwriter on the issuance, purchasing the bonds at a premium of $97 million. PFM Financial Advisors LLC, Rockfleet Financial Services, Inc and Independent Public Advisors, LLC acted as municipal advisors.