The Ohio Water Development Authority (OWDA) issued $100 million in bonds to finance projects that will increase the state’s supply of fresh water.
The bonds mature between 2032 and 2041, yielding between 3.62% and 4.37%. They received a rating of Aaa from Moody’s Investors Service and AAA from S&P Global Ratings.
The bond proceeds will finance loans to local government authorities to create wastewater, sewer, and water supply and distribution facilities.
The rating “reflects the program’s capacity to absorb a high percentage of potential loan defaults without interruption in the payment of bonds debt service (the ‘default tolerance’) and a track record of successful program management and oversight,” Moody’s analysts wrote.
Wastewater infrastructure improvements have historically paid off in Ohio, a water-rich state where more than 80% of rivers were once contaminated with pollutants. Today, 86% of the state’s rivers are in good to excellent condition, up from 18% in the 1980s, according to a recent study by the Ohio Environmental Protection Agency. The study attributed the “dramatic reversal” to wastewater treatment and infrastructure, in addition to soil conservation efforts.
The OWDA awards low interest loans to communities in Ohio to finance drinking water and wastewater projects. The bonds are special obligations of the authority, secured by loan repayments, investment earnings, and some state funds.
Loop Capital Markets LLC served as lead underwriter on the issuance, purchasing the bonds for $107 million. The price reflected a premium of $7 million.