WASHINGTON — The District of Columbia Water and Sewer Authority is proposing to issue $300 million of taxable fixed rate green bonds with a 100-year final maturity, expected to be the first U.S. municipal water/wastewater utility to issue a century bond maturity the first U.S. green bond issuance to include an independent second party opinion.
The bonds will finance a portion of the DC Clean Rivers Project, a $2.6 billion effort to construct tunnels that will transport sewer overflows to DC Water's Blue Plains treatment facility. The offering will take place on or about July 14. The bonds are rated by the three largest credit rating agencies, and are pegged at Aa2 by Moody's Investors Service, AA-plus by Standard & Poor's, and AA by Fitch Ratings.
Green bonds' proceeds go to projects with environmental benefits, and DC Water tapped research agency Vigeo to prepare an independent report detailing why the new century bonds are truly "green." There have been recent indications that green bonds attract a diverse range of investors including some who would not ordinarily buy munis, such as when the New York State Environmental Facilities Corp. saw increased participation in its $213 million bond sale earlier this month.
The DC Water bonds are expected to be due Oct. 1, 2114. They will be senior lien debt secured by the general revenues of the authority, which has just under $500 million of such debt outstanding prior to the century bond issuance. DC Water also has about $1.6 billion of subordinate debt outstanding. The underwriters for the century bonds are Goldman, Sachs & Co. and Barclays.
