Richmond, Virginia, sold $111 million in bonds to make improvements to its public utilities system.
The bonds mature between 2024 and 2053, yielding between 2.98% and 4.44%. The securities received a rating of Aa1 from Moody’s Investors Service, AA from S&P Global Ratings, and AA from Fitch Ratings.
“The Aa1 reflects the strength and stability of the system’s liquidity position and debt service coverage ratios, supported by regular rate increases and long-range financial planning,” according to Moody’s.
The bonds will support renovations to aging utility infrastructure in Richmond. They will also refund outstanding revenue bonds to achieve debt service savings.
Richmond has made strides in improving its drinking water and wastewater infrastructure in recent years, but still faces a significant backlog of improvements, according to the American Society of Civil Engineers, an industry group. ASCE estimates that wastewater remediation in Richmond, Alexandria, and Lynchburg—the three Virginia cities with combined sewer systems—will require between $700 million and $900 million in rehabilitation spending. Statewide, ASCE gave Virginia’s wastewater a “D+” and its drinking water a “C+.”
The public utility system provides natural gas, water, and wastewater to the city of Richmond and some adjacent counties. The bonds are limited obligations of the city, payable by revenues from its utilities.
Wells Fargo Bank, NA, served as lead underwriter on the issuance, purchasing the bonds for $119 million. The price reflected a premium of more than $8 million.