N.Y. Environmental Corp. Readies $312M Refunding Deal

The New York State Environmental Facilities Corp. is planning to sell about $312 million of triple-A rated state clean water and drinking water revolving fund revenue bonds for the New York City Municipal Water Finance Authority.

Jefferies & Co. will price the bonds for institutions on Tuesday, after retail pricing Monday.

The bonds will refund currently callable bonds issued in 2002 to refund bonds issued throughout the 1990s for water pollution control and drinking water projects.

“To a large degree it is the second refunding of bonds, so it’s generating savings upon savings,” said Tracey Hitchen Boyd, deputy director of public finance for the EFC.

She said around $46 million in estimated present-value savings is expected from the refunding deal. Maturities range from 2013 through 2028 and some will be subject to redemption.

Public Financial Management, Inc. is financial advisor and Hawkins Delafield & Wood LLP is bond counsel.

The bonds are special limited obligations payable solely from pledged repayments on related bonds issued by the MWFA, and, on a senior basis, money from de-allocated reserves.

Boyd said this is the first time since 2008 that the EFC is offering bonds under its MWFA senior lien. Last month the corporation sold $497.5 million of refunding bonds under its MWFA subordinate lien.

The new bonds received top ratings and stable outlooks from all three credit rating agencies, citing the strength of the loan repayment stream, significant reserves that allow strong default tolerance, and strong management and oversight.

The EFC has about $12 billion of assets backing approximately $7 billion in debt, resulting in an asset-to-debt ration of 1.7 times, according to Moody’s Investors Service.

“The outlook is stable based on Moody’s expectation that NYCMWFA will continue to maintain its strong credit quality, that senior lien reserve levels will remain substantial, and that significant additional leveraging of the program as a whole will not occur,” analysts said.

The EFC, created in 1970, finances most of its state revolving fund loans to the MWFA by issuing bonds under a master trust indenture. The MWFA finances the capital needs of New York City’s water and sewer system.

NYC’s water system supplies water to approximately 9 million people and draws from reservoir systems, including the Croton, Catskill and Delaware systems. The sewer system is comprised of a network of sewage collection and treatment facilities that treat approximately 1,315 millions of gallons per day of wastewater.

For reprint and licensing requests for this article, click here.
New York
MORE FROM BOND BUYER