Philadelphia Water Department to invest almost $55 million in water & wastewater infrastructure
The net profit after selling bonds will be invested in long-term stability of water infrastructure
The Philadelphia Water Department (PWD) has saved $54.9 million over the next 25 years by selling $368.7 million in Water and Wastewater Revenue Refunding bonds last week. The PWD will continue to make system-wide investments in the water and wastewater infrastructure with these savings.
“Savings from this refunding will help us as we continue our focus on maintaining a high level of service for PWD’s customers,” stated Water Commissioner Randy E. Hayman, Esq, in a recent press release.
How did they accomplish this?
Thirty-three institutional investors and several retail investors ordered over $540 million worth of bonds. The low taxable interest rate environment and positive market reception allowed substantial savings for ratepayers. “We took advantage of low taxable rates and were pleased with the strong reception on this transaction,” shared City Treasurer Jacqueline Dunn in the press release.
The city received confirmation of its existing bond ratings from Moody’s Investors Service, S&P Global Ratings, and Fitch Ratings before the sale. All three rating agencies agreed the PWD has a sturdy financial and operational management, broad and diverse service base, and robust system capacity. However, they also cautioned that the PWD has long-term capital needs and must continue to combat short-term pressures resulting from the COVID-19 pandemic. Despite that, Philadelphia’s highest rated credit is still Water and Wastewater revenue.