The District of Columbia Water and Sewer Authority said demand for $300 million of public utility senior-lien revenue bonds last week was so strong that the agency moved up institutional pricing to the same day as its retail-order period.
“The retail-order period began Tuesday … and was so successful that the institutional period was accelerated from [Wednesday to Tuesday],” DCWASA said in a news release. “By day’s end, there were more orders received than debt to sell.”
“Not only were we oversubscribed, but we had interest from high-quality firms and from the retail sector,” said chief financial officer Olu Adebo.
Top institutional investors included Chubb, First Union, Hartford Life Insurance, and T.Rowe Price, according to the authority.
The bonds were sold at a true interest cost of 5.52% with an average life of 23.5 years, officials said. The deal was structured with serial bonds set to mature out to 2018, and term bonds that mature in 2023, 2028, and 2039.
The deal came after Fitch Ratings — which rated the bonds AA-minus — lifted its outlook on the credit to positive. Moody’s Investors Service rated the deal Aa3 and Standard & Poor’s assigned a AA rating.
Morgan Stanley was lead book-runner. JPMorgan, Siebert Brandford Shank & Co., Banc of America Securities LLC, Citi, Goldman, Sachs & Co., Loop Capital Markets LLC, M.R. Beal & Co., Morgan Keegan & Co., and Stifel Nicolaus & Co. were also on the underwriting team.
“This issuance of debt will enable the authority to move forward with much-needed capital improvements,” said general manager Jerry N. Johnson.