A New York state authority issued more than $300 million in bonds to finance water pollution control and drinking water projects.
The New York State Environmental Facilities Corporation (EFC) issued $255 million in bonds that mature between 2024 and 2045, yielding between 2.65% and 3.57%. The authority also sold $15 million worth of term bonds due June 15, 2048 that are priced to yield 3.66%, and $30.6 million worth of term bonds June 15, 2053 that are priced to yield 3.74%. All of the bonds pay interest at 5%.
The securities received a rating of AAA from Fitch Ratings, AAA from S&P Global Ratings, and Aaa from Moody’s Investors Service.
The EFC “leverages its high credit rating and market demand for tax-exempt bonds to provide capital for wastewater and drinking water projects and refund certain prior bonds,” according to its website.
The issuance comes as New York launches projects to rehabilitate its water infrastructure, which needs $38.7 billion worth of repairs over the next 20 years, according to a report by the state’s Department of Health. The EFC aims to facilitate financing for water infrastructure projects across the state.
That need mirrors nationwide struggles to replace aging water infrastructure. In its 2021 report card, the American Society of Civil Engineers, an industry group, gave U.S. drinking water a grade of “C-.” To combat those woes, President Joe Biden announced a $60 billion commitment to water infrastructure as part of the Bipartisan Infrastructure Law, which he signed into law in November 2021. In fiscal year 2022, New York received more than $470 million in clean water-related appropriations from the legislation.
Citigroup Global Markets Inc served as lead underwriter on the issuance, purchasing the bonds for $337 million. The price reflected a net issue premium of more than $34 million.