The Ohio Water Development Authority issued $350 million in bonds to finance loans to municipalities in the state for eligible wastewater projects.
The authority sold the bonds in two series. The Series 2024A bonds, consisting of $182.7 million, mature between 2039 and 2047, yielding between 3.31% and 3.97%. The Series 2024B bonds, consisting of $167.3 million, mature between 2031 and 2036, yielding between 2.82% and 3.11%. All of the bonds pay interest at 5%. The securities received a rating of Aaa from Moody’s Investors Service and AAA from S&P Global Ratings.
The authority will issue loans under the state revolving fund (SRF), which provides financing for water projects.
“The Aaa rating largely reflects that SRF will continue to maintain high level of overcollateralization,” Moody’s analysts wrote. They added that the SRF can tolerate a default of 44% of loan payments without causing the Ohio Water Development Authority to default on its debt service payments.
In addition to backing loans to Ohio municipalities, the bond proceeds will refund bonds the authority sold in 2016.
The Ohio Water Development Authority is a state instrument that was created in 1968 to fund drinking water and wastewater projects, among other reasons.
The bonds are limited obligations of the authority, payable by pledged loan repayments from its borrowers, as well as interest earnings.
Goldman Sachs & Co LLC served as lead underwriter on the issuance, purchasing the bonds for $395.5 million. The price reflected a premium of $46.9 million and a discount of $1.4 million. PFM Financial Advisors LLC acted as municipal advisor.