Featured Bond: NYC Water Finance Authority
New York City Water Finance Authority – $450 Million | MuniNet Featured Bond
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Featured Municipal Bond Issue, Week of January, 14 2019: New York City Water Finance Authority Water and Sewer Revenue Bonds
The New York City (NYC) Water Finance Authority is issuing $450 million in Water and Sewer System Second General Resolution Revenue Bonds the week of January 14, 2019. These NYC water and sewer bonds are being issued as a single series in two parts (Fiscal 2019 Subseries DD- and DD2) to pay costs of capital improvements to the water and sewer system.
The bonds are rated Aa1 by Moody’s and AA+ by both S&P and Fitch.
The Second Resolution Bonds being issued are a special obligation of the Authority, payable only from and secured by a gross pledge of amounts in certain designated funds associated as well as a debt service reserve fund.
The Board has covenanted to establish and collect rates, fees and charges sufficient in each fiscal year to be at least equal to 1.15x of the aggregate debt service on all First Resolution Bonds (excluding Refundable Principal Installments for the payment of which funds are held in trust) payable in the fiscal year and 100% of the operating expenses and required deposits (which includes debt service on the Second Resolution Bonds and other FGR Subordinate Indebtedness, related to the First Resolution) to the extent required to be paid from Revenues for the Fiscal Year.
The Authority’s offering materials claim that the New York Water Authority has a statutory and contractual first claim on revenues, pledged to the bondholders distinct and apart from New York City, making it bankruptcy-remote from the City.
Details on the purpose, tax-status, security, as well as other matters pertaining to these New York City Water Finance Authority bonds, can be found in the preliminary official statement, which are available on MuniOS. Search on MuniOS for New York Water Finance Authority to obtain the Official Statement and Roadshow Presentation.
The New York Water Authority is operated by the NY Department of Environmental Protection, which supplies drinking water to 9.6 million residents of New York State from 19 reservoirs and 3 controlled lakes. The system also collects wastewater and storm water through 7500 miles of sewers. In addition, the system operates multiple wastewater treatment plants.
The Authority’s capital improvement plan will primarily be funded from bond proceeds. As of June 2018, the capital plan anticipated that approximately $9.7 billion in bons issuance through 2023 of which $300 million is projected to be issued through the the New York State Environmental Facilities Corporation.
Provided above (click to expand) is a quick snapshot of financial characteristics of the New York City Water Finance Authority as of 06/30/2018, compared with the medians for other U.S. states, courtesy of Merritt Research Services, LLC. Merritt has many of the sector medians publicly available and regularly updated on their Benchmark Central page. (Merritt believes the data to be reliable but does not make any representations as to its accuracy or completeness). In addition to the Merritt information related to the featured bond, more information can be found on our municipal bond calendar, city, state, and county pages, and our employment database.
These facts and numbers are for informational purposes, and should not be considered an official disclosure for potential investors. Investors should consult the official statement. None of the information provided should be construed as a recommendation by MuniNet Guide, MuniNet LLC, Merritt Research Services LLC, or any of their employees. Information and analysis is for informational purposes only