September 15, 2021
Contact: John Bowman- 253-946-5401
Lakehaven Water & Sewer District to Issue Bonds with AAA Rating
Lakehaven Water & Sewer District (the “District”) will be issuing $71,630,000 of Water & Sewer Revenue Bonds on September 29th to finance ongoing and future capital improvement projects necessary to ensure the efficient and reliable operation of the water and sewer utilities for decades to come. As part of the bond financing process, the District applied for a bond rating from S&P Global Ratings, a national rating agency that evaluates the creditworthiness of public and private bond issuers. Following a presentation of the District’s financial and management practices to S & P analysts on September 7th, the District was given a rating of “AAA”, the highest financial rating attainable by a municipal issuer.
According to General Manager John Bowman, “The District received the highest bond rating of AAA, a great accomplishment for the District and its ratepayers! This “AAA” rating reflects that the District is well-managed and has very strong financial policies and practices in place for the benefit of our ratepayers. Higher ratings translate to lower interest costs, which will save a significant amount of money for the District over the life of the bonds”.
Current Board President Ron Nowicki Commissioner added, “We are very proud to achieve the “AAA” rating, particularly considering that very few municipal utilities in the State of Washington have received a rating of “AAA” on their debt. It reflects the sound management of the utility systems and the careful financial and infrastructure planning that has been undertaken over many years by Board and staff to ensure that the District is in the best shape possible to provide dependable and cost effective service to our customers. Our staff and consultants have worked very hard on this process and it has certainly paid off.”
The District participated in a 2.5 hour conference call with rating analysts from S&P Global Ratings on September 7th. During the call, the presentation team, comprised of: General Manager John Bowman, General Counsel Steve Pritchett, Director of Finance & Information Systems Morgan Dennis, Accounting Manager Tom Drake, FCS Group (rate consultants), and Jim Nelson, Senior Vice President of D.A. Davidson & Co, Bond Underwriter, provided information about the District and answered questions from the S & P analysts that covered topics of the District’s management and financial practices, economic growth projections, and long-term infrastructure planning.
The Water & Sewer Revenue Bonds were priced on September 14th by D.A. Davidson & Co. As Jim Nelson notes, “Due to the interest in the bonds from many investor groups, fueled in significant part by the AAA rating, the bonds were able to be priced at favorable interest rates. These bonds, financed over 25-years, achieved a net interest cost of 2.22%, very near the historic lows for municipal bonds with these maturities. On top of the low interest rates, the investor premium the District will receive means that the $71,630,000 bond sale will yield an $85,000,000 deposit to the District’s construction fund.”