CHICAGO — Struggling to remain afloat, Iowa’s Xenia Rural Water District is working on a final debt restructuring plan to submit to its board and may do so later this month, officials said Wednesday.
Interim executive director Marc DeLong submitted a proposal for discussion during the closed session portion of the board meeting late last month. He said he received feedback and a revised proposal is in the works, which may be acted on at the next board meeting, tentatively set for Jan. 20. DeLong declined to release details.
The Xenia district made a partial debt-service payment due Dec. 1 on $83 million of water revenue bonds. Insurer CIFG Assurance North America Inc. covered the remainder. The district paid $1.8 million toward its principal and interest payment on the 2006 bonds — $1.26 million shy of the full payment.
The debt-service reserve has been drained and the district has been unable to make required payments to replenish it. Standard & Poor’s last year downgraded the already junk-rated credit to D from BB after it failed to make its full June debt-service payment.
The district is struggling with $140 million of debt that including the tax-exempt bonds and $45.6 million of loans from the U.S. Department of Agriculture’s Rural Development Agency.
The district previously proposed a restructuring plan calling for rate increases, asset sales, and $45.4 million in debt relief, but its creditors refused to forgive the debt.
The USDA said it has since received two draft proposals and provided positive comments, but the agency is awaiting a formal board-approved proposal, according to spokesman Darin Leach.
CIFG and Assured Guaranty Corp. — CIFG’s agent under a reinsurance agreement — declined to comment.