LOS ANGELES — The Las Vegas Valley Water District snared Double A ratings ahead of the planned pricing of as much as $339 million of general obligation bond limited tax refunding bonds on Dec. 11.
Citigroup is the senior manager. JPMorgan, Morgan Stanley and Wells Fargo are co-managers on the deal.
The sale is a current refunding of all or a portion of the district's series 2009C Build America Bonds, according to the preliminary offering documents. The bonds will be sold with maturities of 2031 to 2039 and a 10-year par call to be determined at pricing. The BABs are limited to a call price of 109 in today's market under the legal documents and Nevada law, according to the road show slide show.
The GOLTs received an AA-plus rating with a stable outlook from Standard & Poor's and an Aa2 rating with a stable outlook from Moody's Investors Service. Moody's also affirmed the Aa2 rating on $2 billion of outstanding GOLT debt.
"The district has statutory authority to levy an ad valorem tax on property owners in its service area, which provides substantial financial flexibility; we view this as a credit strength," said Standard & Poor's credit analyst Corey Friedman.
Friedman and S&P Analyst Paul Dyson said in their report that factors limiting the ratings include the district's continued prolonged period of economic weakness, particularly in home prices, but also noted that economic indicators for the past several years show steady improvement.
The assessed valuation has increased by 16% since fiscal 2013 to $62 billion as of fiscal 2015, according to the water district's road show presentation. The district posted operating revenues of $339 million in fiscal 2014. Unemployment in the state has dropped from 14% at the height of the recession to roughly 8%, according to the POS.
The GOLTs have a double-barreled security of the general obligation of the water district and are additionally secured by the Southern Nevada Water Authority pledged revenue sufficient to pay debt service.
LVVWD was created in 1947 as a quasi-municipal corporation for the purpose of obtaining and distributing water in the Las Vegas Valley. It is the primary retail water provider for most of the businesses and residents in Las Vegas and Clark County. SNWA is a wholesale provider of water from the Colorado River for seven-member agencies in the Las Vegas Valley.
