San Francisco Utility Closes Green Bond Sale

PHOENIX - The San Francisco Public Utilities Commission has issued $259 million of taxable water revenue bonds, certified as green bonds through the Climate Bond Initiative.

The water bond sale, which closed Dec. 14 after an initial pricing Nov. 29, is the third green bond issued by the SFPUC and the second bond issued under the Water Climate Bonds Standard. That standard aims to provide investors with verifiable, science-based criteria for evaluating bonds earmarked for financing sustainable water infrastructure projects.

Wells Fargo Securities was the winning bidder for the competitive sale, with a 3.90% true interest cost for the 30-year taxable bonds, rated Aa3 by Moody's Investors Service and AA- by S&P Global Ratings.

The SFPUC said that the green bond designation of the debt resulted in lower interest rates, saving SFPUC ratepayer dollars. SFPUC leadership said in May, when it was the first to issue bonds under the new water bonds standard, that they were unsure green bonds would provide a clear financial advantage but predicted that they eventually would.

"We're upgrading our credit ratings, we're upgrading our bond standards, and most importantly, we're upgrading our aging water and wastewater infrastructure," said Harlan L. Kelly, Jr., general manager of the San Francisco Public Utilities Commission. "Our infrastructure was built to last a hundred years so it's only fitting that we use the latest, most innovative financing techniques to ensure our City's sewer system lasts for the next hundred years."

This particular green bond will provide funding for the Water System Improvement Program. The WSIP is one of the largest infrastructure programs in the nation, strengthening the Hetch Hetchy Regional Water System through large regional construction projects that have created a more seismically robust water lifeline for the San Francisco Bay Area.

The SFPUC is a department of the City and County of San Francisco. It delivers drinking water to 2.6 million people in the San Francisco Bay Area, collects and treats wastewater, and generates clean power for municipal buildings, residents and businesses.

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