Cincinnati-based RSA served as the municipal adviser to the issuance of the District’s Series 2019 Bonds, which totaled $17,845,000. The Series 2019 Bonds, rated Aa2 by Moody’s Investors Services, were sold competitively Sept. 10 at a true interest rate of 2.65% for a 25-year term.
Moody’s has also announced that it has upgraded the Water District’s bond rating on their outstanding debt to Aa2, which will decrease the District’s cost of borrowing money. The improved credit rating resulted in interest savings of approximately $500,000 on the Series 2019 Bonds.
“The upgrade to Aa2 reflects improved debt service coverage ratios and reduction in overall debt burden driven by above-average principal pay-out as well as increased cash-funding of capital projects,” Moody’s said in the announcement.
“The stable outlook reflects the likelihood that the District’s financial position and debt service coverage will remain at or above current levels driven by a stable service area, management’s commitment to conservative budgetary practices, as well as long-range financial planning,” Moody’s said.
“This is another example of how RSA works closely with government and public service agencies to help effectively manage their finances,” said RSA Vice President Joe Lakofka.
The 2019 bond issue provided long term financing for the Ohio River Pump Station 2 Rehabilitation project, the Taylor Mill Treatment Plant Sludge Conveyors and Press project and to make other improvements to the water system through the annual water main replacement program.
“The funds will be spent to fund necessary projects that will help the District maintain existing infrastructure,” said Northern Kentucky President and CEO Ron Lovan. “Our mission is to provide our customers a safe, clean and sufficient water supply through a reliable system that meets all state and federal standards, while delivering great value at a reasonable cost. This bond issuance is necessary for the District to support its mission.
“The District is very excited to have received an improvement to our credit rating, and believe that it accurately reflects the hard work and dedication of the Board of Commissioners and management,” Lovan said.
“Moody’s upgrade of the District’s credit rating is the result of the District’s Board of Commissioners and management team understanding the importance of paying down and managing debt, recovering rates necessary to meet our debt service coverage ratio and managing projects appropriately so that our system needs are met”, said Lindsey Rechtin, the District’s vice president of Finance and Support Services.
“RSA has been an excellent partner, and has assisted the District with numerous bond issuances over the years,” Rechtin said. “This year RSA coordinated a meeting with Moody’s so that an in-person rating meeting could take place. The in-person discussion between Moody’s, RSA, and the District played an important role in all parties understanding each other’s roles and dedication to the bond holder and the rate payer.”