The District of Columbia Water and Sewer Authority sold $440.6 million of tax-exempt bonds, raising $177.4 million for infrastructure improvements and saving $17.8 million by refunding bonds issued in 2003, the authority said Monday.

The negotiated sale, which featured a retail-only period and gave first priority to district residents, was completed March 14.

The pricing was originally scheduled for two days, but an authority official said demand allowed officials to accommodate both retail and institutional investors in one day. The water authority, created in 1996 and relatively new to the muni market, tried to aggressively market the bonds, he said.

Three series were priced. Series A was the $177.4 million, fixed-rate new money portion of the transaction. Series B was $150 million, $100 million of which was SIFMA index variable-rate debt. The bonds were structured with three- and four-year hard puts and priced at initial spreads of SIFMA plus 48 basis points and SIFMA plus 58 basis points, respectively.

Series C was the $163.2 million fixed-rate refunding portion of the transaction, which resulted in a present-value savings of $17.8 million, or 9.7% of refunded par.

The cost of borrowing, including the cost of issuance and underwriting fees, for the fixed-rate portion of the bonds was 3.687%, the authority said.

Siebert Brandford Shank & Co. was senior underwriter on the Series A and C bonds, while JPMorgan and Morgan Stanley were lead underwriters on either the B-1 or B-2 Subseries bonds. Squire Sanders and Leftwich & Ludaway were co-bond counsel.

The debt carries ratings of AA-plus from Standard and Poor’s, Aa-2 from Moody’s Investors Service and AA from Fitch.

The authority said that as a result of its meeting with Standard & Poor’s before issuance, the rating agency upgraded its rating on the senior lien debt to AA-plus from AA, saving the issuer 2 to 3 basis points, or up to $1.5 million of present-value debt service savings.

The transaction is scheduled to be closed on Thursday.

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